Economic Analysis: Theory and Practice
 

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Evaluation of investment agro-industrial projects: Criteria and risks

Vol. 15, Iss. 7, JULY 2016

Received: 17 March 2016

Received in revised form: 12 April 2016

Accepted: 12 May 2016

Available online: 27 July 2016

Subject Heading: INVESTMENT ANALYSIS

JEL Classification: C81, C93, D81, O22, Q19

Pages: 4-17

Yom Din G. Open University of Israel, Raanana, Israel
Gregory@openu.ac.il

Yunusova A. Kuzeev Institute for Ethnological Studies, Ufa Scientific Center of Russian Academy of Sciences, Ufa, Republic of Bashkortostan, Russian Federation
aby_02@mail.ru

Subject The article addresses the issues of evaluation of investment agro-industrial projects, multicriteriality of expert evaluation and its relation to decision-making under risk.
Objectives The aim of the study is to review the analytic hierarchy process to evaluate the criteria of agro-industrial projects and decisions taken by experts, taking into account the tenets of the prospect theory.
Methods The study draws on the analytic hierarchy process as applied to the evaluation of agro-industrial projects, expert decisions based on the principles of the prospect theory, and the regression analysis.
Results We developed a questionnaire and interviewed experts in the Republic of Bashkortostan and the Orenburg oblast. The most significant project criteria are net income and jobs, as for ethnic and social indicators, the most important ones are material well-being of the population and tension among nationalities. The study confirms the hypothesis about decisions taken by experts in accordance with the prospect theory, and evaluates the regression of correspondence of responses of the prospect theory to ranking the criteria by their importance.
Conclusions and Relevance The analytic hierarchy process enables to calculate and compare the importance of criteria for evaluation of agro-industrial projects. Under risk, most of experts make decisions in accordance with basic principles of the prospect theory.

Keywords: Analytic Hierarchy Process, prospect theory, project evaluation, regression, multicriteriality

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