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Çınar, S (2020) Construction labour, subcontracting and masculinity: “construction is a man’s job”. Construction Management and Economics, 38(03), 275–90.
Al-saeed, Y W, Ahmed, A and Pärn, E A (2020) An 80-year projection of nZEB strategies in extreme climatic conditions of Iraq. International Journal of Building Pathology and Adaptation, 38(03), 472–92.
Alves, T d C L, Neuman, Y, Walsh, K D, Needy, K L and AlMaian, R (2020) Highly effective companies in supplier quality surveillance practices: a quantitative analysis. Construction Management and Economics, 38(03), 239–58.
Bröchner, J (2010) Construction contractors as service innovators. Building Research & Information, 38(03), 235–46.
Brunklaus, B, Thormark, C and Baumann, H (2010) Illustrating limitations of energy studies of buildings with LCA and actor analysis. Building Research & Information, 38(03), 265–79.
Chang, Y, Wilkinson, S, Potangaroa, R and Seville, E (2010) Resourcing challenges for post-disaster housing reconstruction: a comparative analysis. Building Research & Information, 38(03), 247–64.
Cooper, J, Lee, A and Jones, K (2020) Sustainable built asset management performance indicators and attributes. International Journal of Building Pathology and Adaptation, 38(03), 508–22.
Espinoza, D, Rojo, J, Cifuentes, A and Morris, J (2020) DNPV: a valuation methodology for infrastructure and Capital investments consistent with prospect theory. Construction Management and Economics, 38(03), 259–74.
- Type: Journal Article
- Keywords: Real options; derivatives; valuation; NPV; DNPV; prospect theory;
- ISBN/ISSN: 0144-6193
- URL: https://doi.org/10.1080/01446193.2019.1648842
- Abstract:
Traditional valuation methods such as net present value (NPV) utilize increased discount rates to account for risk, in the process introducing a time bias effect that promotes short-termism. Application of NPV often discourages much needed infrastructure projects that require large capital investments yet are slow to generate positive cashflows. NPV also downplays the significance of future liabilities and can lead to risk misallocation amongst investment partners and stakeholders. The decoupled net present value (DNPV) method introduces the risk-as-a-cost concept that prices the risk of obtaining lower-than-expected cashflows and thus represents investors’ compensation for bearing such risks. Capturing the loss-aversion attitudes described by prospect theory, DNPV provides a transparent and consistent valuation framework for long-term investments by: (i) calculating expected values of cashflow components using their probability characterizations, (ii) defining the cost of risk (market and non-market) as the expected downside value, (iii) subtracting/adding the cost of risk from/to expected revenues/expenditures, and (iv) discounting the results using risk-free rates. DNPV’s power is illustrated by re-analyzing a 42-year toll-road concession initially evaluated using NPV and real options. The case study shows how explicit risk quantifications could be used to better structure the concession and reallocate risks among stakeholders.
Guerra-Santin, O and Itard, L (2010) Occupants' behaviour: determinants and effects on residential heating consumption. Building Research & Information, 38(03), 318–38.
Hoxha, V (2019) Measuring embodied CO2 emission in construction materials in Kosovo apartments. International Journal of Building Pathology and Adaptation, 38(03), 405–21.
Hu, M, Bergsdal, H, van der Voet, E, Huppes, G and Müller, D B (2010) Dynamics of urban and rural housing stocks in China. Building Research & Information, 38(03), 301–17.
Iyer, K C, Kumar, R and Singh, S P (2020) Understanding the role of contractor capability in risk management: a comparative case study of two similar projects. Construction Management and Economics, 38(03), 223–38.
Kotera, Y, Green, P and Sheffield, D (2020) Work-life balance of UK construction workers: relationship with mental health. Construction Management and Economics, 38(03), 291–303.
Meins, E, Wallbaum, H, Hardziewski, R and Feige, A (2010) Sustainability and property valuation: a risk-based approach. Building Research & Information, 38(03), 280–300.
Mohamed, I F, Edwards, D J, Mateo-Garcia, M, Costin, G and Thwala, W D D (2019) An investigation into the construction industry’s view on fire prevention in high-rise buildings post Grenfell. International Journal of Building Pathology and Adaptation, 38(03), 451–71.
Oladunjoye, O A, Proverbs, D G, Collins, B and Xiao, H (2019) A cost-benefit analysis model for the retrofit of sustainable urban drainage systems towards improved flood risk mitigation. International Journal of Building Pathology and Adaptation, 38(03), 423–39.
Sharifi, A A and Farahinia, A H (2020) Evaluation of the adaptive reuse potential of historic buildings and proposition of preventive-protective measures. International Journal of Building Pathology and Adaptation, 38(03), 493–507.
Viswanathan, S K, Tripathi, K K and Jha, K N (2020) Influence of risk mitigation measures on international construction project success criteria – a survey of Indian experiences. Construction Management and Economics, 38(03), 207–22.
Wang, Z (2019) Building internal heat dissipation of special shaped columns composed of concrete-filled square steel tubes based on thermal bridge models. International Journal of Building Pathology and Adaptation, 38(03), 441–9.