Excess Revenue Allocation for Build-Operate-Transfer Highway Projects

Jinbo Song, Lulu Jin and Wanli Dong

Journal of Transport Economics and Policy, 2016, vol. 50, issue 3, 304--324

Abstract: Revenue uncertainty and volatility are problems in BOT highway projects because it is difficult to predict accurately future traffic volume. In high traffic demands, the absence of an excess revenue allocation mechanism leads to the private sector obtaining huge profits, and a high revenue risk to the government and the public. To solve this problem, the Black–Scholes (B–S) pricing method is used to determine the revenue cap, and a dynamic model is proposed to determine the excess revenue allocation proportion considering the consumer surplus rate and the revenue cap. Finally, the proposed model is illustrated by a numerical example.

Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.jstor.org/stable/jtranseconpoli.50.3.0304

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:2016:50:3:304--324

Access Statistics for this article

Journal of Transport Economics and Policy is currently edited by B T Bayliss, S A Morrison, A Smith and D Graham

More articles in Journal of Transport Economics and Policy from University of Bath
Bibliographic data for series maintained by Christopher F. Baum ().