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| Ethier, Robert G.. |
| Valuation of electricity generating assets is of central importance as utilities are forced to spin-off generators with the introduction of competitive markets. A continuous-time mean reverting price path with stochastic upward jumps is proposed as an appropriate model for long-run competitive electricity prices faced by a generator. A real options model is derived via dynamic programming using infinite series solutions. The derived model produces asset values which are uniformly higher than those produced by existing models, and which accurately predict observed generator sale prices. The model has favorable implications for stranded cost recovery and generator entry in competitive markets. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Real options; Electricity deregulation; Mean reversion; Jump processes; Asset valuation; Marketing. |
| Ano: 1999 |
URL: http://purl.umn.edu/7222 |
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| Ethier, Robert G.; Poe, Gregory L.; Schulze, William D.; Clark, Jeremy. |
| To date, much of the policy and research debate on contingent valuation mode effects has relied on experiences drawn from other research disciplines. This study provides the first contingent valuation phone-mail comparison that meets current standards for response rates, draws from a general population, is relevant to the valuation of general environmental goods, and allows comparisons with actual sign-ups. Consistent with previous research in other disciplines, social desirability bias is found in responses to subjective questions --thus leading to more environmentally favorable responses on the phone. However, this effect does not carry over to hypothetical participation decisions. Hypothetical bias is found in both modes. Yet, application of calibration... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Environmental Economics and Policy. |
| Ano: 1997 |
URL: http://purl.umn.edu/7245 |
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