Research On Investment Decision Of Home-based Care In The PPP Projects From The Perspective Of Private Capital

In recent years,with the continuous development of the economy,the standard of living and medical care have risen rapidly,and the average life expectancy of people is expected to be longer and longer year by year.Under the influence of the continuously declining birth rate and death rate,the population of the elderly in China continues to increase,aging is becoming more and more serious,and the aging service industry is facing great challenges.The use of the government and social capital cooperation(PPP)model to provide service for the aged will not only help alleviate government financial pressure,speed up the transfer of government functions,but also help improve the supply efficiency and quality of home care services.However,as the PPP project to supply home-based care services belongs to social welfare,the project involving complex relevant subjects,long investment operation cycle,and many uncertain factors affects income and costs,leading to the unstablebility of the future cash flow of the project.It is expected that the profitability will be insufficient.The enthusiasm to participate is very low.Through the introduction of real options theory,this paper helps private capital to select appropriate investment opportunities and methods in investment decisions,construct flexible investment strategies to unearn the profit opportunities in uncertainty,thereby increasing the investment value of home-based pension PPP projects.Based on the background of aging population and the contradiction between the supply and demand of old-age care services,this paper proposes the government failures theory and welfare pluralism theory,and proposes that there is a “government failure” in the provision that the government as the only entity to supply home-based care services for the aged,the model of Multi-parties as such social parties participating to supply service should be used.On this basis,this paper analyzes the existing problems of China's home-based care services and analyzes the necessity and feasibility of applying the PPP model to home-based care services based on public product theory and project differentiation theory.Then this article combines the participation situation of private capital in endowment PPP projects,discusses the uncertainty of the PPP projects to provide home-based care service from the macro level and the micro level,and introduces the real option theory through the comparative analysis of the investment decision-making methods under the uncertain conditions.By identifying the type of real options existing in the PPP projects,using deferred options as an example explore the rules that the capital make flexibly optimal investment decisions and choose the value of investment under the uncertainty conditions,and perform sensitivity analysis about their parameters.According to the results,it provides reference suggestions for investment decision-making of PPP projects for home-based pensions,with a view to increase the participation of private capital.