The Research Of Durable Goods Purchase Timing Model Based On Option Method

With the development of economy, people’s income level have improved significantly. There have a wide range of research on household financial assets investment decisions in the academia. But there is still a big gap in the field of household durables consumption. Since the reform and opening, the urban household durables demand has experienced from nothing to more, from low level to high level development. At present family durable goods consume is more scientific and rational and consumers pay more attention to comprehensive quality of the product. Durable goods is an important family asset allocation, with the characteristics of long using time and large investment amount. So, family pay more cautious than the nondurable when making purchasing decisions.From the actual situation, the cost performance of family durable goods has the trend of rising, so families have the incentive to wait holding cash. Namely, family durable goods purchasing behavior has a real option attribute and family is equivalent to hold a delay option. This paper precisely take this as a starting point and build the family durable goods purchase timing model based on the real option method, designing to guide the family make a buying decision to maximize the utility consumption. This paper refers to a large number of references. Dynamic programming method and the differential equation method are used in solving the delay option value and the trigger values. It is concluded the delay option value’s analytic expression under the trigger of the best purchasing time. The model and results are used to explain the common family durable goods delay and purchase time inconsistent phenomenon.In addition, different from other research results, this paper conduct a case study taking household car purchase timing decision as an example. And draw the following main conclusions:decision threshold and delay option values are very sensitive to the subjective discount rate variance and comprehensive quality variance, and there are negative correlation and positive correlation between them respectively.With the improvement of family subjective discount rate, the decision threshold and delay option value decrease, the probability of triggering threshold become greater in a limited time. When the automobile comprehensive quality appear larger fluctuation on the market, family decisions facing bigger risk, the value of delay options increase and families are more willing to wait, the probability of the arrival of optimal purchasing timing is smaller. That are consistent with the characteristics of option value, that is, the greater the uncertainty, the higher the option value. Thereby verifies the validity of the model, and this also the innovation of this paper.