The paper illustrates a theoretical model of real option value applied to the problem of land development.Making use of the 1998-2001 Kyrgyz Household Budget Survey, we show that when the hypothesis of decreasing return to scale holds, the relation between the threshold value of revenue per...

The paper aims at modeling adoption and diffusion decisions of farmers towards genetically modified crops under a real option framework. Modern GM crops help farmers to resolve two main sources of uncertainty: output uncertainty and input uncertainty. Those crops represent a revolutionary form...

This report illustrates the application of a (relatively) new method to guide decision making under high (and unknowable) levels of uncertainty. The approach allows for the identification of robust policy options that are economically beneficial under different scenarios and varying levels...

This paper investigates the recent evolution of the oil price, with the objective to analyze the main drivers that during last fifteen years have led the unstable path and the volatility persistence in the international oil market. We assume that the oil price is composed by two components,...

This paper examines the controversial problem of the choice of the social discount rate in development projects, by focusing on the investment required to adapt to climate change, considering the threats to food security and the needs for human and natural capital, especially for developing...

In this paper authors present a preliminary approach to the evaluation of policies and projects based on current thinking on cost benefit analysis and real option methodology and the authors' recent work on the same subject. Authors start from the assumption that economic agents undertake...