High speed rail transport valuation

Pimentel, Pedro; Azevedo-Pereira, José; Couto, Gualter

http://hdl.handle.net/10400.3/4807

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Authors

Pimentel, Pedro

Azevedo-Pereira, José

Couto, Gualter

Abstract(s)

The present paper investigates the optimal timing of investment for a high speed rail (HSR) project, in an uncertain environment, using a real options analysis (ROA) framework. It develops a continuous time framework with stochastic demand that allows for the determination of the optimal timing of investment and the value of the option to defer in the overall valuation of the project. The modelling approach used is based on the differential utility provided to railway users by the HSR service.

Keywords

High Speed Rail Investment Real Options

URI

http://hdl.handle.net/10400.3/4807

Citation

Pimentel, Pedro; Azevedo-Pereira, José; Couto, Gualter (2008). High speed rail transport valuation, "Working Paper Series", 14, 27 pp.. Ponta Delgada: Universidade dos Açores, CEEAplA-A.