Shadow price of capital

{
  "id": "MLC-T-ENV-025378",
  "term": "Shadow price of capital",
  "field": "Environment",
  "definition": "Accounts for the social value of displacing private capital investments. For example, when a public project displaces private sector investments, the correct method for measuring the social costs and benefits requires an adjustment of the estimated costs (and perhaps benefits as well) prior to discounting using the consumption rate of interest. This adjustment factor is referred to as the “shadow price of capital.”",
  "subject": "General environmental",
  "references": [
    "Preparing Economic Analyses Glossary"
  ],
  "url": "https://mlchart.com/terminology/environment/shadow-price-of-capital/"
}