Estimating the Economic Opportunity Cost of Capital for Public Investment Projects : An Empirical Analysis of the Mexican Case

This paper offers an assessment of the methodologies employed to estimate the economic opportunity cost of capital for public sector projects, relying on the Mexican case for an applied empirical exercise. The traditional weighted cost of capital (...

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Bibliographic Details
Main Authors:	Coppola, Andrea, Fernholz, Fernando, Glenday, Graham
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING ALTERNATIVE INVESTMENT ALTERNATIVE INVESTMENTS ASSETS AVERAGE DEBT BANKING SECTOR BASE YEAR BENCHMARK BORROWING COSTS BUDGET CONSTRAINTS CAPACITY BUILDING CAPITAL ACCOUNT CAPITAL ASSETS CAPITAL FUNDS CAPITAL GAINS CAPITAL INVESTMENTS CAPITAL MARKET CAPITAL MARKETS CAPITAL SHARE CAPITAL SHARES CAPITAL STOCKS CASH BALANCES CENTRAL BANK CLOSED ECONOMIES COMMODITY COMPETITIVE MARKET COMPETITIVENESS CONSUMERS CORPORATE BONDS CORPORATE INCOME TAXES CORPORATE SAVING COST OF CAPITAL COST OF EQUITY COST OF FUNDS COUNTRY CREDIT COUNTRY RISK COUNTRY RISKS CREDIT RATING DATA AVAILABILITY DEBT DEBT DATA DEBT INTEREST DEBT RATIOS DECISION MAKING DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT INVESTMENT DISCOUNT RATE DISCOUNT RATES DIVIDENDS DOMESTIC CURRENCY DOMESTIC PRICES ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC INFORMATION ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC RESOURCES ECONOMIC TRENDS ECONOMIC VALUE ENVIRONMENTAL SUSTAINABILITY EQUIPMENT EQUITY FINANCING EQUITY RETURNS EXCHANGE RATE EXPANSIONARY MONETARY POLICIES EXPECTED RETURNS EXTERNAL DEBT EXTERNALITIES EXTERNALITY FACTORS OF PRODUCTION FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL FLOWS FINANCIAL RETURN FINANCIAL SAVINGS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STRUCTURE FIXED CAPITAL FOREIGN CAPITAL FOREIGN EXCHANGE GDP GLOBAL EQUITY GLOBAL FINANCE GLOBALIZATION GOVERNMENT BONDS GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SECURITIES GROSS VALUE HOUSEHOLD SAVINGS INCOME INCOME TAXES INCOMES INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTITUTIONAL INVESTOR INTANGIBLE INTANGIBLE ASSETS INTEREST RATE INTEREST RATES INTERNAL RATE OF RETURN INTERNATIONAL BANK INTERNATIONAL BORROWING INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INVENTORIES INVENTORY INVESTING INVESTMENT CHOICES INVESTMENT FLOWS INVESTMENT FUNDS INVESTMENT INSTRUMENTS INVESTMENT MANAGEMENT INVESTMENT OPTIONS INVESTMENT PROJECTS INVESTMENT RATES LABOR MARKETS LONG-TERM INVESTMENT MACRO-ECONOMIC POLICIES MARGINAL COST MARGINAL PRODUCT MARGINAL PRODUCTIVITY MARKET EVIDENCE MARKET INFORMATION MARKET INTEREST MARKET INTEREST RATE MARKET PRICES MARKET RISK MARKET RISKS MARKET SHARES MARKET TRANSACTIONS MONETARY FUND MONETARY POLICIES MONETARY SUPPLY MONOPOLY MONOPOLY RENTS NATIONAL INCOME NDP NEGATIVE EXTERNALITY NET CAPITAL NET DOMESTIC PRODUCT OPEN ECONOMIES OPPORTUNITY COST OPPORTUNITY COSTS OPTIMAL INVESTMENT OUTPUT OUTPUT OF CAPITAL OUTPUTS PARTICULAR COUNTRY PENSION PENSION FUNDS PERSONAL INCOME PORTFOLIO PORTFOLIO INVESTMENTS PORTFOLIO MANAGEMENT POWER PARITY PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE ELASTICITY OF SUPPLY PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE SAVINGS PRODUCT MARKETS PROPERTY TAXES PROPERTY VALUES PUBLIC INVESTMENT PUBLIC POLICY PUBLIC SECTOR BONDS PUBLIC SECTOR DEBT PUBLIC STOCKS PURCHASING POWER RATE OF INVESTMENT RATE OF RETURN TO CAPITAL RATES OF INTEREST RATES OF RETURN REAL INTEREST RESERVES RETURN RETURN ON ASSETS RISK PREMIUM RISK PREMIUMS SAVINGS SAVINGS INSTRUMENTS SAVINGS RATE SAVINGS RATES SECURITY MARKETS SHARE OF ASSETS SHARE OF CAPITAL SHARE VALUE SHARES OF INVESTMENT SHARES OF INVESTMENTS STOCK EXCHANGE STOCK MARKET STOCK MARKET INDEX TAX TAX COLLECTION TAX RATE TAX RATES TAX REVENUES TAXATION TRANSACTION TRANSPARENCY TREASURY TREASURY BILLS VALUATION VALUE ADDED VOLATILITY WAGE RATES WAGES WEALTH WITHHOLDING TAX WORKING CAPITAL WORLD ECONOMY WORLD MARKETS
Online Access:	http://documents.worldbank.org/curated/en/2014/03/19298150/estimating-economic-opportunity-cost-capital-public-investment-projects-empirical-analysis-mexican-case http://hdl.handle.net/10986/17724

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http://documents.worldbank.org/curated/en/2014/03/19298150/estimating-economic-opportunity-cost-capital-public-investment-projects-empirical-analysis-mexican-case
http://hdl.handle.net/10986/17724

Estimating the Economic Opportunity Cost of Capital for Public Investment Projects : An Empirical Analysis of the Mexican Case

Internet

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