Has the real options approach been used to value infrastructure investments in the water industry?
The water industry is undergoing deregulation, spurring a need for asset valuations that are aligned with water pricing. This is the same phenomena that has previously occurred in the electricity and gas industry, and articles about the financially-engineered products and asset valuation in these industries might be of use. Enron has a business unit active in the water industry, so expect an invasion of real options thinking.
