Pricing Relocation–Redevelopment Projects for City Expansion: The Case in China
研究中国城市在土地有限下通过搬迁、拆除和再开发扩张时，如何利用实物期权定价模型找到最优时机，并分析政府可调控哪些因素来影响再开发速度。
A solution to city expansion under limited land availability is relocation of existing habitants, demolition of existing buildings and redevelopment of new buildings. In the case of Chinese cities, however, such strategies have become a channel for municipalities to increase their revenue from sale of land and productivity from increased development, at the expense of low compensation to former occupants and vacant housing after development. We utilize a sequential real options pricing approach to find conditions when relocation/demolition and redevelopment in a finite time horizon are optimal and also to show what factors the governments can influence to delay or speed up redevelopment.