What is the best way to set an environment variable in .bashrc?

The best way

export VAR=value

The difference

Doing

VAR=value

only sets the variable for the duration of the script (.bashrc in this case). Child processes (if any) of the script won't have VAR defined, and once the script exits VAR is gone.

export VAR=value

explicitly adds VAR to the list of variables that are passed to child processes. Want to try it? Open a shell, do

PS1="foo > "
bash --norc

The new shell gets the default prompt. If instead you do something like

export PS1="foo > "
bash --norc

the new shell gets the prompt you just set.

Update: as Ian Kelling notes below variables set in .bashrc persist in the shell that sourced .bashrc. More generally whenever the shell sources a script (using the source scriptname command) variables set in the script persist for the life of the shell.

Both seem to work just fine, but using export will ensure the variable is available to subshells and other programs. To test this out try this.

Add these two lines to your .bashrc file

TESTVAR="no export"
export MYTESTVAR="with export"

Then open a new shell.

Running echo $TESTVAR and echo $MYTESTVAR will show the contents of each variable. Now inside that same shell remove those two lines from your .bashrc file and run bash to start a subshell.

Running echo $TESTVAR will have an empty output, but running echo $MYTESTVAR will display "with export"