Article (Scientific journals)
Where and When to Invest in Infrastructure
Brueckner, Jan K; Picard, Pierre M
2014In Regional Science and Urban Economics
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Abstract :
[en] This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the investment, doing so under imperfect observability of the investment gains. The two models considered in the paper differ in the source of the imperfection. In the signal model, the imperfection comes from imperfect observability of initial income gains from the investment, while in the option model, it comes from the stochastic nature of the income gains in the second period. In addition to providing the first treatment of this type of problem, the analysis shows that the influences of underlying parameters on whether or not the government waits to invest are similar in the two models.
Disciplines :
Economic systems & public economics
Author, co-author :
Brueckner, Jan K;  University of California
Picard, Pierre M ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
External co-authors :
yes
Language :
English
Title :
Where and When to Invest in Infrastructure
Publication date :
November 2014
Journal title :
Regional Science and Urban Economics
ISSN :
0166-0462
Publisher :
Elsevier Science
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBilu :
since 26 February 2015

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