Study On The Investment Decision Of Public Rental Housing PPP Project Based On Real Option Theory

As the backbone of China's affordable housing system,public rental housing is mainly invested by the government at present.The insufficient participation of social capital has resulted in a series of problems,such as huge pressure on government funds,high cost of construction,insufficient supply efficiency of public rental housing,etc.The PPP mode makes it convenient for the private sector to participate in the investment and construction of public rental housing.It becomes an effective way to sovle the financing dilemma and improve the supply efficiency of public rental housing.Hence,it has been introduced into the financing construction of public rental housing in both theory and practice.Taking raising social capital as the start point,this paper studies the investment decision of the private sector participating in public rental housing PPP project from the perspective of real option.Firstly,this paper systematically combs and reviews the relevant theories of public housing and public housing financing,investment decision of PPP project and real option,and determines the basic content and direction of the research.Secondly,on the basis of expounding the typical characteristics,typical operation mode and basic operation process of public rental housing PPP project,this paper summarizes the three characteristics of irreversibility,uncertainty and flexibility of public rental housing PPP project.The deficiency of traditional investment decision method in public rental housing PPP project has been analysed,and it has been compared with the real option method,and then the applicability of real option method in the investment decision of public rental housing PPP project has been discussed.After that,from the perspective of private sector investment decision-making,the real options in different stages of public rental housing PPP project's life cycle has been identified,and four kinds of real options including delay option,abandonment option,expansion option and guarantee option have been determined.The investment decision pricing model of public rental housing PPP project has been constructed by choosing the classical binary tree method in real option theory.Finally,through the case study of the model,the value of multi-stage composite real options and the investment value of public rental housing PPP project have been solved,which verifies the practical application value of the model.The investment decision model of public rental housing PPP project constructed in this paper provides theoretical support and method reference for private sector to make investment decision on public rental housing PPP project.With frontier and scientific nature to some extent,it will help to alleviate government's financial pressure and improve the quality and efficiency of public rental housing project development.