Improvement of Social Discount Rate of Public Investment Projects Considering Risk (위험을 고려한 공공투자사업의 사회적 할인율에 대한 개선방안)

Lee Eui-kyung (이의경)

doi:10.15793/kspr.2021.110..007

Improvement of Social Discount Rate of Public Investment Projects Considering Risk

The Korea Spatial Planning Review
2021, 110(), pp.113-125
DOI : 10.15793/kspr.2021.110..007
Publisher : 국토연구원
Research Area :
Received : July 6, 2021
Accepted : September 23, 2021
Published : September 30, 2021

Lee Eui-kyung ¹

¹대진대학교

Accredited

ABSTRACT

Social Discount Rate(SDR) is a key factor in the economic evaluation of public investment projects. The preceding studies have estimated the appropriate SDR from a time-series perspective. This study, on the other hand, sought ways to improve SDR from a cross-sectional perspective in consideration of risk. This study proposed a method to obtain a SDR by reflecting the risk of public investment project using CAPM, and revealed that beta of the industry to which the public investment belongs can be usefully used as beta of CAPM. This study proposed to divide public investment projects into three industrial sectors(SOC, environment & water resources, science & technology). To help understand this improvement, a specific case of calculating the SDR using industry beta is presented. In addition, this study explained the difference between the risks of benefits and costs within the same project needs different discount rates. As it is important to calculate the appropriate SDR considering the risk of public investment projects, this improvement can increase the logical robustness of economic evaluation of public investment projects.

KEYWORDS

Public Investment Projects, Social Discount Rate, Risk, CAPM, Industry Beta

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* References for papers published after 2023 are currently being built.

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The Korea Spatial Planning Review 2023 KCI Impact Factor : 1.2

Improvement of Social Discount Rate of Public Investment Projects Considering Risk

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* References for papers published after 2023 are currently being built.

The Korea Spatial Planning Review 2023 KCI Impact Factor : 1.2

Improvement of Social Discount Rate of Public Investment Projects Considering Risk

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KEYWORDS

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