Risk-Analysis Techniques for the Economic Evaluation of Investment Projects

Abstract

The argument of Pope Francis’ “Laudato si’” Encyclical was developed around the concept of “integral ecology”: «Since everything is closely interrelated and today’s problems require a vision capable of taking account every aspect of the global crisis, I suggest we now consider some elements of an integral ecology, one which clearly respects its human and social dimension» (Pope Francis 2015). With regard to investment initiatives, the pursuit of not only financial but also social, cultural and environmental objectives requires a careful and accurate analysis of the various risk components associated with this concept. The objective of this paper is to strongly focus on the concept of risk and the techniques that are commonly used for risk analysis in the economic evaluation of projects. Also included are the identification of critical issues and outlining of potential successful research prospects that are linked to the entire process.