Declining Discount Rates: Evidence from the UK

Table 1: Estimation Results

Panel A: AR(4) model
Coefficient	Estimate	Std. Error	t-stat.
n	1.201	0.177	6.777
a1	1.054	0.058	18.165
a2	-0.125	0.089	-1.392
a3	-0.443	0.070	6.308
a4	0.368	0.035	10.452
^σ2!	0.064	0.005	13.733

Panel B: Regime Switching model

Coefficient	Estimate	Std. Error	t-stat.
ni	0.760	0.244	3.117
_a1₁	0.700	0.312	2.249
_a1₂	-0.212	0.312	-0.679
n2	1.306	0.082	15.892
a²₁	1.397	0.079	20.573
a²₂	-0.530	0.058	-9.094
σ2₁	0.219	0.047	4.694
_σ2₂	0.014	0.002	8.106
P	0.767	0.101	7.543
Q	0.933	0.033	28.617

Panel C: State Space model

Coefficient	Estimate	Std. Error	t-stat.
n	0.266	0.044	6.091
n1	0.991	0.002	438.82
ln(σ_e² )	-2.503	0.104	-24.049
^ln(^σ2u)	-6.462	0.594	-10.884

Table 2. Certainty Equivalent Discount Factors

Model Year	3.5% Constant	AR(4)	Regime Switching	State Space
Л	0.96618	0.96618	0.96618	0.96618
20	0.50257	0.48208	0.51472	0.61857
40	0.25257	0.23676	0.26746	0.40678
60	0.12693	0.11778	0.13981	0.27722
80	0.06379	0.05912	0.07354	0.19368
100	0.03206	0.02997	0.0389	0.13775
150	0.00574	0.00569	0.00813	0.06172
200	0.00103	0.00115	0.00177	0.02882
250	0.00018	0.00027	0.00041	0.01379
300	0.00003	0.00008	0.0001	0.00669
350	0.00001	0.00003	0.00003	0.00328
400	0.00000	0.00002	0.00001	0.00161

More intriguing information

1. An Interview with Thomas J. Sargent
2. Non-farm businesses local economic integration level: the case of six Portuguese small and medium-sized Markettowns• - a sector approach
3. The ultimate determinants of central bank independence
4. Cryothermal Energy Ablation Of Cardiac Arrhythmias 2005: State Of The Art
5. Credit Markets and the Propagation of Monetary Policy Shocks
6. Experience, Innovation and Productivity - Empirical Evidence from Italy's Slowdown
7. Heavy Hero or Digital Dummy: multimodal player-avatar relations in FINAL FANTASY 7
8. Wirkt eine Preisregulierung nur auf den Preis?: Anmerkungen zu den Wirkungen einer Preisregulierung auf das Werbevolumen
9. The name is absent
10. The name is absent
11. An Economic Analysis of Fresh Fruit and Vegetable Consumption: Implications for Overweight and Obesity among Higher- and Lower-Income Consumers
12. The name is absent
13. The demand for urban transport: An application of discrete choice model for Cadiz
14. Quelles politiques de développement durable au Mali et à Madagascar ?
15. Literary criticism as such can perhaps be called the art of rereading.
16. Innovation Trajectories in Honduras’ Coffee Value Chain. Public and Private Influence on the Use of New Knowledge and Technology among Coffee Growers
17. The name is absent
18. A Computational Model of Children's Semantic Memory
19. Optimal Rent Extraction in Pre-Industrial England and France – Default Risk and Monitoring Costs
20. O funcionalismo de Sellars: uma pesquisa histδrica