Study On Real Option Method Of Public Infrastructure Projects Investment

Public infrastructure construction is an important component of national economic and social development, so it is vital for the development of both society and the city we lived to ensure the infrastructure and economy increasing harmoniously. Since the reforming and opening, the high-speed development of our nation's economy needs more and more public infrastructure projects. But owing to limited finance, the lack of capital has seriously restricted the development of public infrastructure construction. So our country and local government have been transferring manage authority, absorbing the nongovernmental fund to build public infrastructure by financial way, and have already tried a lot. But here also exposed problems on many aspects such as the technology, policy, etc, the basic and most important reason led to these problems exist in how to ensure the value of public infrastructure projects.The thesis analyses the economic conception and characters of public infrastructure and the limitation of traditional financial methods. Then the conception of real options is put out, and is applied to estimating the value of public infrastructure projects that contained complex uncertainties. And based on the investment uncertainty character of public infrastructure projects, an innovation that real option Black-Scholes price model based on real options with variable carry-out price is proposed. Then it is proved that applying real options method to analyze the management flexibility of the public infrastructure project is has really remedies the deficiency of traditional estimating methods. In the end, a compare analysis is done between real option methods and traditional estimating methods, and the thesis also pays attention the application problems and some further research problems of real option methods in practice.