OMB Circular A-94 Discount Rates for Time-Distributed Costs and Benefits.csv

Data
circular guideline discount rate benefit cost analysis federal program circular
number transmittal memo memorandum head executive department establishment guideline discount
rate benefit cost analysis federal program table content page purpose
rescission authority scope general principle present value related outcome measure
cost effectiveness analysis element benefit cost cost effectiveness analysis identifying
measuring benefit cost identifying benefit cost measuring benefit cost treatment
inflation real nominal value recommended inflation assumption discount rate policy
real versus nominal discount rate public investment regulatory analysis cost
lease internal government asset sale analysis treatment uncertainty characterizing uncertainty
expected value sensitivity analysis adjustment uncertainty incidence distributional effect alternative
classification economic incidence special guidance public investment analysis analysis excess
burden exception special guidance regulatory impact analysis special guidance lease
purchase analysis coverage required justification lease analytical requirement definition related
guidance implementation effective date interpretation appendix definition term appendix additional
guidance discounting appendix discount rate cost lease related analysis goal
circular promote efficient resource allocation well informed decision making federal
provides general guidance conducting benefit cost cost effectiveness also provides
specific guidance discount rate used evaluating federal program whose benefit
cost distributed general guidance serve checklist whether agency considered properly
dealt element sound benefit cost cost effectiveness circular replaces rescinds
office management budget circular number discount rate used evaluating time
distributed cost dated march circular number evaluating lease capital dated
june lease purchase analysis appropriate decision made acquire service guidance
lease purchase analysis provided section section circular issued authority section
budget accounting circular doe number supersede agency practice prescribed pursuant
executive relevant circular guideline suggested internal planning executive branch guideline
must followed analysis submitted support legislative budget program compliance circular
number preparation submission annual budget number legislative coordination guideline must
also followed providing estimate submitted compliance executive order number federal
president april memorandum requiring benefit cost analysis certain legislative aside
exception listed guideline circular apply analysis used support government decision
expand program project would result series measurable benefit cost extending
three year circular applies specifically benefit cost cost effectiveness analysis
federal program regulatory impact analysis decision whether lease asset valuation
sale specifically exempted scope circular decision water resource project guidance
approved economic environmental principle guideline water related land resource implementation
acquisition commercial type service government contractor operation guidance circular number
federal energy management program guidance found federal register january november
circular applies agency executive branch federal doe number apply government
district columbia number federal recipient contract recipient follow guideline provided
preparing analysis support federal small project share similar agency encouraged
conduct generic study avoid duplication effort carrying economic general benefit
cost analysis recommended technique formal economic analysis government program cost
effectiveness analysis less comprehensive appropriate benefit competing alternative policy decision
made benefit must appendix provides glossary technical term used technical
term italicized first present value related outcome standard criterion deciding
whether government program justified economic principle present value discounted monetized
value expected benefit benefit minus present value computed assigning monetary
value benefit discounting future benefit cost using appropriate discount subtracting
total discounted cost total discounted discounting benefit cost transforms gain
loss occurring different time period common unit program positive present
value increase social resource generally program negative present value generally
section considers discounting issue although present value number always computable
doe number usually reflect effect income effort measure produce useful
insight even monetary value benefit cost comprehensive enumeration different type
benefit monetized helpful identifying full range program quantifying benefit cost
even number feasible assign monetary physical measurement possible summary effectiveness
measure provide useful supplementary information present analyst encouraged report example
include number injury prevented dollar cost measured present value term
project internal rate cost effectiveness program cost effective basis life
cycle cost analysis competing determined lowest cost expressed present value
term given amount cost effectiveness analysis appropriate whenever unnecessary impractical
consider dollar value benefit provided alternative case whenever alternative annual
benefit expressed monetary alternative annual dollar value assigned analysis alternative
defense system often fall cost effectiveness analysis also used compare
program identical cost differing decision criterion discounted present value alternative
program largest benefit would normally element benefit cost cost effectiveness
policy rationale government program examined clearly stated program justified efficiency
ground address market public good also justified improve efficiency government
internal cost saving explicit analysis explicit underlying assumption used arrive
estimate future benefit case public health necessary make assumption number
future intensity rate increase medical analysis include statement rationale behind
review strength data year year estimate benefit reported promote independent
analysis evaluation analysis also consider alternative mean achieving program objective
examining different program different method different degree government evaluating decision
acquire capital analysis generally direct converting existing government leasing contracting
retrospective study determine whether anticipated benefit cost realized potentially study
used determine necessary correction existing improve future estimate benefit cost
program related agency plan result oriented evaluation program also discus
result relevant evaluation study proposing reauthorizations increased program identifying measuring
benefit analysis include comprehensive estimate expected benefit cost society based
established definition practice program policy social number benefit cost federal
basis evaluating government program policy effect private citizen level social
benefit cost differ private benefit cost measured marketplace imperfection arising
external economy diseconomies action party impose benefit cost group number
compensated market monopoly power distorts relationship marginal cost market tax
identifying benefit intangible tangible benefit cost relevant cost concept broader
private sector production compliance cost government cash cost reflect opportunity
cost resource measured return resource productive application guideline consider identifying
benefit incremental benefit calculation present value based incremental benefit sunk
cost realized benefit past experience relevant helping estimate value future
benefit cost might analysis take particular care identify extent policy
subsidy program promotes substitute activity similar nature would occur without
either displaced activity explicitly recorded cost incremental gain recorded benefit
interactive possible interaction benefit cost analyzed government activity policy affecting
agricultural output reflect real economic opposed subsidized international analysis focus
benefit cost accruing citizen united state determining present program project
effect outside united effect reported economic gain pure transfer payment
benefit receive transfer matched cost borne transfer excluded calculation present
transfer arise result program project analyzed identified distributional effect also
recognized transfer program benefit less program real economic cost inefficiency
arise program delivery benefit measuring benefit principle willingness provides aggregate
measure individual willing forego obtain given market price provide invaluable
starting point measuring willingness price sometimes number adequately reflect true
value good monopoly tax subsidy distort market usually create excess
burden represents loss appropriate method recognizing excess burden public investment
analysis discussed section market price number exist relevant benefit market
price distorted method valuing benefit measure derived actual market behavior
preferred inframarginal benefit consumer would generally willing market price rather
entirely without good economist concept consumer surplus measure extra value
consumer derive consumption compared value measured market consumer surplus provides
best measure total benefit society government program consumer surplus sometimes
calculated using econometric method estimate consumer indirect measure benefit willingness
sometimes estimated indirectly change land variation wage method reliable based
actual market measure consistent basic economic principle multiplier analysis treat
resource likely fully employment output multiplier purport measure secondary effect
government expenditure employment output number included measured social benefit treatment
future inflation highly analyst avoid make assumption general rate inflation
whenever real nominal economic analysis often readily accomplished using real
constant dollar measuring benefit cost unit stable purchasing estimate reflect
expected future change relative reasonable basis estimating future benefit cost
given nominal term future purchasing power analysis value rather convert
constant dollar case lease purchase nominal real value must number
combined logical consistency requires analysis conducted either constant dollar term
nominal require converting nominal value real vice recommended inflation general
inflation assumption rate increase gross domestic product deflator administration economic
assumption period analysis project program extend beyond year budget inflation
assumption extended using inflation rate sixth year budget administration economic
forecast updated twice time budget published january february time session
review budget alternative inflation based credible private sector used sensitivity
discount rate order compute present necessary discount future benefit discounting
reflects time value benefit cost worth experienced future benefit including
nonmonetized benefit higher discount lower present value future cash typical
cost concentrated early period benefit following later raising discount rate
tends reduce present technical guidance discounting table discount factor provided
appendix real versus nominal discount proper discount rate depends whether
benefit cost measured real nominal real discount rate adjusted eliminate
effect expected inflation used discount constant dollar real benefit real
discount rate approximated subtracting expected inflation nominal interest nominal discount
rate reflects expected inflation used discount nominal benefit market interest
rate nominal interest rate public investment regulatory guidance section applies
benefit cost analysis public investment regulatory program provide benefit cost
general guidance related cost effectiveness analysis internal planning decision federal
government provided section public investment regulation displace private investment account
displacement promote efficient investment regulatory following guidance base case constant
dollar benefit cost analysis proposed investment regulation report present value
outcome determined using real discount rate rate approximates marginal pretax
rate return average investment private sector recent significant change rate
reflected future update discount analysis show sensitivity discounted present value
outcome variation discount importance alternative calculation depend specific economic characteristic
program analyzing regulatory proposal whose main cost reduce business present
value also calculated using higher discount rate analysis include among
reported outcome internal rate return implied stream benefit internal rate
return discount rate set present value program project internal rate
return doe number generally provide acceptable decision doe provide useful
particularly budget constrained uncertainty appropriate discount using shadow price capital
value benefit cost analytically preferred mean capturing effect government project
resource allocation private method analyst must able compute benefit cost
program project affect allocation private consumption concurrence required method used
place base case discount cost lease internal government asset sale
treasury borrowing rate used discount rate following cost effectiveness analysis
involve constant dollar cost real treasury borrowing rate marketable security
comparable maturity period rate computed using administration economic assumption published
january table discount rate based expected interest rate first year
budget forecast presented appendix appendix updated annually available upon request
real treasury rate obtained removing expected inflation period analysis nominal
treasury interest analysis involve nominal cost nominal treasury rate described
following lease purchase analysis nominal lease payment nominal treasury borrowing
rate marketable security comparable maturity period nominal treasury borrowing rate
taken economic assumption table discount rate based assumption presented appendix
updated constant dollar lease purchase analysis real treasury borrowing described
preceding internal government federal investment provide internal benefit take form
increased federal revenue decreased federal example would investment energy efficient
building system reduces federal operating unlike case federally funded highway
provides external benefit society appropriate calculate project present value using
comparable maturity treasury rate discount rate used either nominal depending
benefit cost federal activity provide federal cost saving external social
federal investment information technology produce federal saving form lower administrative
cost external social benefit form faster claim present value investment
evaluated percent real discount rate discussed section unless analysis able
allocate investment cost provision federal cost saving external social allocation
federal cost saving associated investment cost discounted treasury external social
benefit associated investment cost discounted percent real asset sale analysis
possible asset sale reflect present value federal government holding asset
best measured discounting future earnings stream using treasury rate used
either nominal depending earnings analysis government asset value explicitly deduct
cost expected default delay payment projected cash along government administrative
analysis also consider explicitly probability event would cause asset become
impaired well probability event would increase asset analysis possible asset
sale assess gain social efficiency result government asset subject market
discipline private even though government asset used efficiently private potential
private sector purchaser generally discount asset earnings rate excess treasury
cost bearing evidence government asset used efficiently private valuation analysis
asset include sensitivity comparison discount return asset rate interest earned
asset similar riskiness private treatment estimate benefit cost typically uncertain
imprecision underlying data modeling uncertainty basic many effect analyzed useful
information report would include source expected value estimate sensitivity result
important source probability distribution characterizing analysis attempt characterize source nature
probability distribution potential benefit recognized many phenomenon treated deterministic certain
analyzing uncertain objective estimate probability used whenever market private insurance
payment interest rate useful identifying estimating relevant stochastic simulation method
useful analyzing phenomenon developing insight relevant probability basis probability distribution
assumption limitation analysis uncertainty bias surrounding data assumption expected expected
value distribution cost benefit obtained weighting outcome probability summing across
potential estimated cost benefit characterized point estimate rather probability expected
value unbiased estimate appropriate estimate estimate differ expected value worst
case estimate provided addition expected rationale estimate must clearly analysis
identify nature magnitude study past activity documented tendency cost growth
beyond initial analysis consider whether past experience suggests initial estimate
benefit cost sensitivity major assumption varied present value outcome recomputed
determine sensitive outcome change assumption deserve attention depend dominant benefit
cost element area greatest uncertainty program analyzing retirement would consider
change number future wage discount sensitivity analysis considered estimate benefit
discount general inflation distributional model used analysis well documented available
facilitate independent adjustment absolute variability risky outcome much less significant
correlation significant determinant social real national variation discount rate number
appropriate method adjusting present value special risk particular possible estimate
certainty equivalent involve adjusting uncertain expected value account incidence distributional
principle maximizing present value benefit based premise gainer could fully
compensate loser still better presence absence compensation indicated benefit cost
significant distributional effect analyzed along analysis present number usually case
cost effectiveness analysis scope government activity number alternative distributional effect
analyzed grouping individual household according income class income geographical demographic
group industry appropriate analysis identifying relevant gainer loser policy effect
preexisting assignment property right program analysis policy intended benefit specified
subgroup analysis consider effective policy reaching targeted economic individual household
ultimate recipient business enterprise merely analysis distribution identify economic cost
benefit ultimately borne household determining economic incidence difficult benefit cost
often redistributed unintended unexpected subsidy production commodity usually raise income
commodity also benefit consumer commodity lower price reduce income supplier
competing subsidy also raise value specialized resource used production subsidized
subsidy incorporated asset distributional effect special guidance public guidance applies
public investment social benefit apart decreased federal number required cost
effectiveness lease purchase tax generally distort relative impose burden excess
revenue recent study system suggest range value marginal excess reasonable
estimate cent dollar analysis excess presentation result public investment number
justified cost saving ground include supplementary analysis percent excess cost
form public expenditure multiplied factor present value specific information clearly
suggests excess burden lower higher analysis different different figure explanation
provided example exception investment funded user charge function like market
excess burden would another example would project provides cost saving
federal government external social possible make quantitative determination portion project
cost give rise federal portion cost exempted multiplication factor special
guidance regulatory impact additional guidance analysis regulatory policy provided regulatory
program united state government published annually regulatory impact analysis appendix
regulatory program united state government april march special guidance lease
purchase special guidance section doe number apply decision acquire deciding
agency conduct benefit cost decision acquire service asset made need
analyze decision whether lease circular applies following test applicability lease
purchase analysis concern capital including durable land leased federal government
term three economic life less three leased federal government term
percent economic life built express purpose leased federal leased federal
government clearly number alternative commercial special purpose government lease purchase
analysis concern capital asset group related asset whose total fair
market value exceeds required justification lease capital asset must justified
preferable direct government purchase done three conducting separate lease purchase
acceptable method major lease represents major acquisition acquisition represents separate
line item agency agency determines acquisition major total purchase price
asset group asset leased would exceed conducting periodic lease purchase
analysis recurrent decision lease similar asset used general analysis would
apply entire class approval sought determining scope generic adopting formal
policy smaller lease submitting policy following policy generally result lease
purchase decision would conducting separate lease purchase adopting demonstrated lease
question would generally result substantial saving government could number realized
lease small short term make separate lease purchase analysis lease
different type scored consistently instruction appendix circular number analytical requirement
whenever federal agency need acquire capital least expensive government life
cycle lease purchase analysis compare discounted present value life cycle
cost leasing full cost buying constructing identical full cost buying
include asset purchase price plus discounted present value relevant ancillary
service connected guidance discount rate lease purchase analysis section economic
purpose lease purchase economic life asset remaining productive begin asset
acquired end asset retired economic life frequently number useful life
purchase purchase price asset purpose lease purchase analysis fair market
defined price willing buyer could reasonably expect willing seller competitive
market acquire case property already owned federal government donated acquired
imputed purchase price guidance making imputation provided section public land
used site imputed market value land added purchase asset estimated
residual period subtracted purchase guidance estimating residual value provided section
analyzing cost normal payment tax lessor income lease number subtracted
lease cost since normal payment tax also reflected purchase cost
treasury special associated lease added cost example benefit might include
highly accelerated depreciation allowance free ancillary term lease include ancillary
service provided present value cost obtaining service separately added purchase
cost excluded estimated lease purchase alternative small affect example ancillary
service cost associated acquiring property preparing including management repair improvement
cost included lease operation maintenance cost included lease imputed property
tax excluding foreign property tax overseas acquisition except actually imputed
tax approximate cost providing municipal service police fire section imputed
insurance section estimating imputed certain cost associated federal purchase asset
number involve direct monetary imputed cost estimated purchase imputed purchase
price asset already owned federal government acquired donation condemnation based
fair market value similar property traded commercial market similar method
followed estimating imputed value federal land used site property imputed
property tax estimated determine property rate assessed taxable value comparable
property intended basis estimate future change rate assessed first year
rate assessed value inflation adjusted subsequent year applied multiply assessed
value rate determine annual imputation property alternative step obtain estimate
current local effective property rate building owner manager association regional
exchange multiply fair market value government owned property inflation adjusted
year effective insurance determine local estimate standard commercial coverage similar
property building owner manager association regional exchange residual property residual
value estimate price property could sold period lease purchase measured
discounted present value recommended estimate residual value determine comparably aged
property currently selling commercial book estimate resale value used property
available industry government assessed value comparably aged property determined property
purpose also renewal determining term renewal option shall added initial
lease related circular number preparation submission annual budget circular number
legislative coordination circular number federal credit circular number performance commercial
circular number policy followed acquisition major circular number management federal
information joint treasury guideline department defense covering lease charter arrangement
aircraft naval executive order federal regulatory impact analysis regulatory program
united state federal energy management planning life cycle cost methodology
federal number january number november presidential memorandum april benefit cost
legislative economic analysis submitted reviewed conformity item circular number budget
justification submission circular number legislative review effective circular effective question
concerning interpretation circular addressed office economic office management budget case
regulatory issue office information regulatory affair appendix definition term benefit
cost analysis systematic quantitative method assessing desirability government project policy
important take long view future effect broad view possible side
capital asset tangible including durable certainty equivalent certain nonrandom outcome
individual value equally uncertain riskaverse certainty equivalent uncertain benefit less
mathematical expectation individual value chance winning risk averse individual certainty
equivalent uncertain cost larger magnitude mathematical expectation cost effectiveness systematic
quantitative method comparing cost alternative mean achieving stream benefit given
consumer surplus maximum money consumer would willing consume given amount
less amount actually represented graphically area demand curve price line
diagram representing consumer demand good function discount rate interest rate
used calculating present value expected yearly benefit discount factor factor
translates expected benefit cost given future year present value discount
factor equal interest rate number year date initiation program policy
given future excess burden unless imposed form lump unrelated economic
head affect economic decision departure economic efficiency resulting distorting effect
tax called excess burden disadvantage society without adding treasury concept
also sometimes referred deadweight external economy diseconomy direct either positive
someone profit welfare arising byproduct person firm also referred neighborhood
spillover externality incidence ultimate distributional effect regulatory inflation proportionate rate
change general price opposed proportionate increase specific inflation usually measured
broad based price implicit deflator gross domestic product consumer price
internal rate return discount rate set present value stream benefit
equal internal rate return multiple value stream benefit alternate negative
positive life cycle cost overall estimated cost particular program alternative
time period corresponding life including direct indirect initial cost plus
periodic continuing cost operation multiplier ratio direct effect output employment
full including effect second order round multiplier effect greater require
existence involuntary present value difference discounted present value benefit discounted
present value nominal value economic unit measured term purchasing power
date nominal value reflects effect general price nominal interest rate
interest rate number adjusted remove effect actual expected market interest
rate generally nominal interest opportunity cost maximum worth good input
among possible alternative real constant dollar value economic unit measured
term constant purchasing real value number affected general price real
value estimated deflating nominal value general price implicit deflator gross
domestic product consumer price real interest rate interest rate adjusted
remove effect expected actual real interest rate approximated subtracting expected
actual inflation rate nominal interest precise estimate obtained dividing plus
nominal interest rate plus expected actual inflation subtracting resulting relative
price price ratio good ratio price energy price shadow price
estimate price good input would absence market externality shadow price
capital present value social return capital corporate income tax measured
unit sunk cost cost incurred past number affected present future
sunk cost ignored determining whether investment transfer payment payment money
pure transfer unrelated provision good service payment alter distribution number
directly affect allocation resource treasury rate rate interest marketable treasury
debt issued maturity ranging day willingness maximum amount individual would
willing give order secure change provision good appendix additional guidance
discounting sample format discounting deferred cost benefit assume year program
commit government stream real constant dollar expenditure appearing column table
result series real benefit appearing column discount factor percent discount
rate shown column present value cost year calculated multiplying column
column present value benefit year calculated multiplying column column present
value cost benefit presented column year since renewal expansion expected
yearly cost expected yearly benefit discount factor present value cost
present value benefit total discount factor calculated interest rate column
total present value cost column total present value present value
difference discounted benefit discounted year year discount factor discount factor
presented table calculated implicit assumption cost benefit occur lump sum
year cost benefit occur steady applying year discount factor first
cost table estimated occur rather year approximate better steady stream
cost benefit occurring first assumed cost benefit advanced month approximate
better continuing steady present value cost benefit computed table converted
year discounting basis multiplying square root example converted year present
value cost would present value benefit would present value would
illustrative discount factor discount rate percent year since beginning year
year year renewal discount discount discount expansion factor factor factor