When i 1, i2 and i3 are all decimals, the above formula can be simplified as: ic=i 1+i2+i3.
When the project expenditure and income are calculated at constant prices, IC = (1+I1) (1+I2) _1.
As can be seen from the above, the benchmark rate of return is determined by many factors, and it is difficult to determine the benchmark rate of return with the changes of the above factors. However, the benchmark rate of return is the key to adopt the net present value method, which determines the choice of the project. Therefore, as investors, we should carefully determine the size of the benchmark rate of return.
The study of China's rate of return not only reveals the changing characteristics of the relationship between rate of return and income and income distribution, but also enriches the rate of return research and economic theory in methods, such as measurement methods, the changing characteristics of the relationship between rate of return and income, and so on. To sum up, the main conclusions are as follows:
1. According to the data before 1997, the rate of return of cities and towns in China is still lower than the average level of the world and Asia, and the subsequent research results have approached or begun to exceed this level, indicating that the degree of marketization reform of urban labor force in China is gradually improving.
2. In contrast, the rate of return in rural areas is still relatively low, about 3-4 percentage points lower than that in cities and towns, especially in recent years. The explanation for this phenomenon is the division of labor market and the backwardness of rural production technology. The low rural rate of return may have a negative impact on the demand for rural residents' rate of return, and this conclusion needs further empirical test.
3. In China, it is found that the rate of return is increasing, which may be caused by the structural distortion in economic development and the distortion of the rate of return investment system, and will further widen the income gap, so we need to pay enough attention to it in policy.
4. In other aspects of the rate of return estimation, the rate of return of women is higher than that of men, and the rate of return in the western region is higher than that in the eastern region, and the rate of return gradually increases with time.
5. Institutional factors still affect the return on investment of China residents, and the weak role of market mechanism in the allocation of labor resources before the mid-1990s explains the low return in China during this period.
6. The research shows that the rate of return in China has gradually increased during the transition period, and the internal mechanism of this change is mainly attributed to the institutional change oriented by market-oriented reform. Some studies have also found that the above characteristics of China's rate of return may also aggravate income inequality.