Equity risk premium of Estonia
The equity risk premium of Estonia is 4.30% (as of 28 Oct 2026).
- Mature market 3.22%
- Estonia 1.08%
The breakdown
| Part | Value | Basis |
|---|---|---|
| Mature market premium | 3.2230% | Observed |
| Country default spread | 0.5297% | Modelled |
| Volatility ratio | 2.0310 | Modelled |
| Country risk premium | 1.0758% | Modelled |
| Total equity risk premium | 4.2988% | Modelled |
Observed means worked out from market or official data. Modelled means estimated from other countries' data.
How each part was found
We have no bond series for Estonia that we can use, so its default spread is estimated from the euro-area countries we can observe, using the current-account balance as a share of GDP. The volatility ratio is one constant, the average of the ratios we measured for the United States, Germany and Canada. That makes the country premium and the total modelled.
Where Estonia stands
Estonia is 136th of 175 countries by equity risk premium, counted from the highest.
Among the 18 countries whose totals are modelled, Estonia is 8th.
The median for the 49 countries in Europe is 4.53%, and totals there run from 3.22% (Denmark) to 29.88% (Belarus). Estonia is 0.24 points below that median.
At 4.30%, that is 1.33 times the mature market premium of 3.22%.
Estonia is in the euro area. Its total is 1.08 points above Germany's 3.22%, and Germany is the euro-area reference.
The closest countries by total are Bermuda (4.32%), Chile (4.32%) and Poland (4.32%).
How it is calculated
Total premium = mature market premium + country premium.
The country premium is the extra yield the country's government pays over Germany's, multiplied by how much more volatile its shares are than its bonds.
Use it in a cost of equity calculation
Cost of equity = risk-free rate + beta x equity risk premium. With made-up inputs of a 4.00% risk-free rate and a beta of 1.2, a company earning in Estonia has a cost of equity of 4.00% + 1.2 x 4.30% = 9.16%.
The figures are in US dollar terms. For another currency, add the inflation difference between the two currencies.
Get it by API or MCP
GET /v1/economics/EST/equity-risk-premium
{ "country": "EST", "as_of": "2026-10-28",
"country_risk_premium": "1.0758", "total_erp": "4.2988",
"basis": { "total_erp": "modelled", ... } }
MCP: economics_get_equity_risk_premium { "country": "EST" }Latest figure, history and every country, free with an API key.
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Common questions
What is the equity risk premium of Estonia?
The equity risk premium of Estonia is 4.30% (as of 28 Oct 2026), the extra return investors expect from shares over a risk-free government bond.
How is the country risk premium of Estonia worked out?
Its default spread is estimated from the euro-area countries we can observe, and the volatility ratio is one constant. The country premium is 1.08% and the total is 4.30%.
Which equity risk premium should I use for Estonia?
For a company whose cash flows are mostly earned in Estonia, use 4.30%. For one earning in several countries, weight each country's premium by where its cash flows come from.
How often is it updated?
Every month. Each figure carries its date, and earlier dates stay in the history endpoint.