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1 décembre 2021
- handle: 10670/1.6wc54m
Ce document est lié à :
10.21919/remef.v16i4.610
info:eu-repo/semantics/openAccess
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Bank discount Discount rate Aversion, LossCiter ce document
David Ceballos Hornero et al., « The Entrepreneurial Social Discount Rate: Risk Premium and Loss Aversion in New Ventures », Revista mexicana de economía y finanzas, ID : 10670/1.6wc54m
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Résumé
We derive a mathematical extension of the social discount rate (SDR) in such a way that we can valuate intergenerational startups financed with personal and government funds at the aggregate level. The results imply that the precise determination of the SDR can change the financial priority of investment. Therefore, we recommend government officials to include factors of economic growth (wealth effect), intergenerational prevention (precautionary effect), loss aversion, and the specific risk of the business in the valuation of new ventures and in the estimation of the social discount rate to be more representative of the social utility. Our contribution lies in including a risk premium from the firm’s average non-systematic risk and the loss aversion of a representative investor in estimating the SDR.