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Evaluation of investment projects under uncertainty: multi-criteria approach using interval data

Author

Listed:
  • Olga A. Shvetsova

    (Korea University of Technology and Education, Korea, Republic of)

  • Elena A. Rodionova

    (Peter the Great St. Petersburg Polytechnic University, Russian Federation)

  • Michael Z. Epstein

    (Saint Petersburg State University of Economics, Russian Federation)

Abstract

Multi-criteria decision making (MCDM) methods have evolved for various types of applications. In the past, even small variations to existing methods have led to the creation of new avenues for research. Thus, in this study, we review the MCDM methods in investment management and examine the advantages and disadvantages of these methods in a risk environment. In addition, we study the effectiveness of investment projects using these methods. The analysis of MCDM methods performed in this study provides a guide for the use of these methods, especially the ones based on interval data, in investment project analysis. Furthermore, we propose a combination of multi-criterial selection and interval preferences to evaluate investment projects. Our method improves on the method of calculating economic efficiency based on a one-dimensional criterion and sensitivity analysis, though our proposal involves complicated calculations.

Suggested Citation

  • Olga A. Shvetsova & Elena A. Rodionova & Michael Z. Epstein, 2018. "Evaluation of investment projects under uncertainty: multi-criteria approach using interval data," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(4), pages 914-928, June.
    • Handle: RePEc:ssi:jouesi:v:5:y:2018:i:4:p:914-928
    DOI: 10.9770/jesi.2018.5.4(15)
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    References listed on IDEAS

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    2. Tsoutsos, Theocharis & Drandaki, Maria & Frantzeskaki, Niki & Iosifidis, Eleftherios & Kiosses, Ioannis, 2009. "Sustainable energy planning by using multi-criteria analysis application in the island of Crete," Energy Policy, Elsevier, vol. 37(5), pages 1587-1600, May.
    3. Brav, Alon & Graham, John R. & Harvey, Campbell R. & Michaely, Roni, 2005. "Payout policy in the 21st century," Journal of Financial Economics, Elsevier, vol. 77(3), pages 483-527, September.
    4. Abbas Mardani & Ahmad Jusoh & Edmundas Kazimieras Zavadskas & Zainab Khalifah & Khalil MD Nor, 2015. "Application of multiple-criteria decision-making techniques and approaches to evaluating of service quality: a systematic review of the literature," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(5), pages 1034-1068, October.
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    Citations

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    Cited by:

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    2. Olga Shestak & Oleg L. Shcheka & Yury Klochkov, 0. "Methodological aspects of use of countries experience in determining the directions of the strategic development of the Russian Federation arctic regions," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 0, pages 1-19.
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    More about this item

    Keywords

    multicriterial approach; risk management; Pareto set; investment project; interval data; investment project evaluation;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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