Investeringsrente

Investeringsrente is a term used in public sector economics to denote the discount rate used when evaluating the profitability or social value of investment projects. It represents the opportunity cost of capital for society: the return that could be earned by deploying resources elsewhere over time. In cost-benefit analysis, future cash flows from a planned project are converted to present value using this rate, and the project’s net present value indicates whether it creates net social value.

Determination and use

The invsereringsrente is typically established by government authorities or economic policy guidance. It often reflects long-term government borrowing costs, expectations about the social opportunity cost of capital, and adjustments for risk and time horizon. The rate serves as a benchmark for comparing alternative investments and for deciding which projects to approve. A project is generally considered favorable if its discounted benefits exceed its discounted costs, resulting in a positive net present value at the chosen investeringsrente.

Implications and critique

The choice of investeringsrente has a strong influence on public investment decisions, especially for long-term projects with substantial future benefits. A higher rate makes long-duration projects less attractive, while a lower rate tends to favor them. Critics argue that the rate is often sensitive to assumptions about growth, risk, and intertemporal welfare, which can lead to biased outcomes, undervaluation of non-market benefits, or inequities in who benefits from investments.

See also

Cost-benefit analysis, discount rate, net present value, social discount rate.