Valuation when disaster risks increase at an increasing rate

Ravi Joshi, Rajesh P. Narayanan and R. Kelley Pace

Economics Letters, 2023, vol. 224, issue C

Abstract: Atmospheric CO2 been growing at an increasing rate for many years and this suggests that investments may face an increasing rate of future disaster risk. We provide a simple variation of the Gordon Growth model that accounts for potential increasing disaster risks and provides a closed-form bound to the reduction in value.

Keywords: Climate change; Increasing risks; Gordon growth model; Real estate; Valuation (search for similar items in EconPapers)
JEL-codes: M2 Q2 R1 R3 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:224:y:2023:i:c:s0165176523000381

DOI: 10.1016/j.econlet.2023.111013

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