Dr Ted Pinchbeck, a Fellow in Real Estate Economics and Finance at LSE and one of the authors of the research, said: “Prices of leaseholds of different lengths provide direct new evidence on how people discount the very far future. Our results support the use of a time-declining discount rate, which is used for policy evaluation here in the UK, but not everywhere in the world. This kind of discount rate implies that people are actually willing to pay more or take action now to improve things in the distant future.
Related publications
‘The Time Value of Housing: Historical Evidence on Discount Rates,’ Economic Journal Philippe Bracke, Edward W. Pinchbeck, James Wyatt. A copy of this paper is available from the LSE press office.