Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/20810
Title: Transit technology investment and selection under urban population volatility: A real option perspective
Authors: Li, ZC
Guo, QW
Lam, WHK 
Wong, SC
Keywords: Comparative static analysis
Net present value approach
Population volatility
Real option approach
Transit technology investment and selection
Urban spatial equilibrium
Issue Date: 2015
Publisher: Pergamon Press
Source: Transportation research. Part B, Methodological, 2015, v. 78, p. 318-340 How to cite?
Journal: Transportation research. Part B, Methodological 
Abstract: This paper addresses transit technology investment issues under urban population volatility using a real option approach. Two important problems are investigated: which transit technology should be selected and when should it be introduced. A real option model is proposed to incorporate explicitly the effects of transit technology investment on urban spatial structure in terms of households' residential location choices and housing market. The trigger population thresholds for investing in a transit technology project and for shifting from a transit technology to another are explored analytically. Comparative static analyses of the urban system and transit technology investment are also carried out. It was found that (i) transit technology investment can induce urban sprawl; (ii) ignoring the effects of transit technology investment on urban spatial equilibrium can lead to a late investment; and (iii) there is a significant difference in the trigger population thresholds for transit technology shift estimated by the net present value approach and the real option approach.
URI: http://hdl.handle.net/10397/20810
ISSN: 0191-2615
EISSN: 1879-2367
DOI: 10.1016/j.trb.2015.05.006
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