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@article{ART001645383},
author={강동진 and Song Byung-Rok and Cheong-Hyun Rho},
title={Economic Feasibility Study of the Road Project Using Real Options Analysis},
journal={The Korea Spatial Planning Review},
issn={1229-8638},
year={2012},
volume={72},
pages={41-62},
doi={10.15793/kspr.2012.72..003}

TY - JOUR
AU - 강동진
AU - Song Byung-Rok
AU - Cheong-Hyun Rho
TI - Economic Feasibility Study of the Road Project Using Real Options Analysis
JO - The Korea Spatial Planning Review
PY - 2012
VL - 72
IS - null
PB - 국토연구원
SP - 41
EP - 62
SN - 1229-8638
AB - The purpose of this study is to consider the way of applying the real options analysis to the economic feasibility study of the road project. It is said that the real options analysis can supplement the traditional NPV(net present value)'s weakness that can't consider the future's uncertainty. This study reviewed the definition of the real options firstly, and investigated the theories of option valuation models, risk-neutral approach, four-step option valuation process etc. And then three kinds of options(option to contract/abandon/defer) were applied to a road project that the pre-feasibility study had been undertaken on it, and the value of options were estimated. The results showed that NPV of the road project increased when the options were applied. And the value of options increased as the volatility of the underlying asset and the life of option increase. These results shows that the theories about real options can be realized well in the case of the feasibility study of the road projects. But the greatest limit of this study is that the value of time - instead of the traffic volume - was used to estimate the volatility of the underlying asset. This limit was caused by difficulty in the acquisition of the relevant transportation analysis software file. So in the future study, it is necessary to resolve this difficulty and to consider the traffic volume in estimating the volatility of the underlying asset.
KW - Road Project;Economic Feasibility Study;Real Option;Traffic Volume;Value of Time
DO - 10.15793/kspr.2012.72..003
ER -

강동진, Song Byung-Rok and Cheong-Hyun Rho. (2012). Economic Feasibility Study of the Road Project Using Real Options Analysis. The Korea Spatial Planning Review, 72, 41-62.

강동진, Song Byung-Rok and Cheong-Hyun Rho. 2012, "Economic Feasibility Study of the Road Project Using Real Options Analysis", The Korea Spatial Planning Review, vol.72, pp.41-62. Available from: doi:10.15793/kspr.2012.72..003

강동진, Song Byung-Rok, Cheong-Hyun Rho "Economic Feasibility Study of the Road Project Using Real Options Analysis" The Korea Spatial Planning Review 72 pp.41-62 (2012) : 41.

강동진, Song Byung-Rok, Cheong-Hyun Rho. Economic Feasibility Study of the Road Project Using Real Options Analysis. 2012; 72 41-62. Available from: doi:10.15793/kspr.2012.72..003

강동진, Song Byung-Rok and Cheong-Hyun Rho. "Economic Feasibility Study of the Road Project Using Real Options Analysis" The Korea Spatial Planning Review 72(2012) : 41-62.doi: 10.15793/kspr.2012.72..003

강동진; Song Byung-Rok; Cheong-Hyun Rho. Economic Feasibility Study of the Road Project Using Real Options Analysis. The Korea Spatial Planning Review, 72, 41-62. doi: 10.15793/kspr.2012.72..003

강동진; Song Byung-Rok; Cheong-Hyun Rho. Economic Feasibility Study of the Road Project Using Real Options Analysis. The Korea Spatial Planning Review. 2012; 72 41-62. doi: 10.15793/kspr.2012.72..003

강동진, Song Byung-Rok, Cheong-Hyun Rho. Economic Feasibility Study of the Road Project Using Real Options Analysis. 2012; 72 41-62. Available from: doi:10.15793/kspr.2012.72..003

강동진, Song Byung-Rok and Cheong-Hyun Rho. "Economic Feasibility Study of the Road Project Using Real Options Analysis" The Korea Spatial Planning Review 72(2012) : 41-62.doi: 10.15793/kspr.2012.72..003