THE TEST RATE OF DISCOUNT AND CHANGES IN BASE-LEVEL INCOME IN THE UNITED KINGDOM.

Many different approaches have been suggested for estimating the rate of discount which a government should use in appraising projects in the public sector. That the test rate of discount is almost certainly too high, and that it ought to be lowered and public investment increased, if, indeed, it does at present yield as much as 10% per annum at the margin, is very similar to that reached by those who have based their argument for a low social discount rate on the modest rates of increase of average consumption per head. [ABSTRACT FROM AUTHOR]