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Evaluating Infrastructure Projects under Risk and Uncertainty: A Checklist of Issues
Author(s) -
Clarke Harry
Publication year - 2014
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12047
Subject(s) - checklist , investment (military) , ignorance , risk analysis (engineering) , actuarial science , risk assessment , business , economics , management science , finance , political science , psychology , management , politics , law , cognitive psychology
Abstract The implications of risk, investment irreversibility and learning for infrastructure project assessment are considered, using investment in desalination as a case study. Both qualitative insights from ‘real options ’ approaches and arguments based on policy‐maker risk aversion to investment appraisal are summarised. A checklist of key issues is presented. Remarks are also made about how pure uncertainty and gross ignorance can influence policy determination .