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Real options and demographic decisions [An article from: Journal of Development Economics]
Book Details
Author(s)S. Iyer, C. Velu
PublisherElsevier
ISBN / ASINB000RR8W0G
ISBN-13978B000RR8W08
AvailabilityAvailable for download now
Sales Rank99,999,999
MarketplaceUnited States 🇺🇸
Description
This digital document is a journal article from Journal of Development Economics, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
The theory of real options is used to incorporate the influence of uncertainty on demographic decision-making. The decision to have children is formulated as an investment using portfolio theory. The timing of the decision to have a child is modelled as a real options decision, with uncertainty affecting a woman's ability to exercise the 'option to wait' in order to delay or space births. An increase and reduction in uncertainty on this option is explored. Compared to the widely used net present value (NPV) framework, the real options approach (ROA) better explains the process of demographic decision-making in poor countries.
Description:
The theory of real options is used to incorporate the influence of uncertainty on demographic decision-making. The decision to have children is formulated as an investment using portfolio theory. The timing of the decision to have a child is modelled as a real options decision, with uncertainty affecting a woman's ability to exercise the 'option to wait' in order to delay or space births. An increase and reduction in uncertainty on this option is explored. Compared to the widely used net present value (NPV) framework, the real options approach (ROA) better explains the process of demographic decision-making in poor countries.
