Explaining refugee flows. Understanding the 2015 European refugee crisis through a real options lens

In 2015 the unprecedented arrival of refugees in Europe posed serious challenges for the EU and its member countries on how to deal with such an influx. A key element in better managing refugee flows is to understand what drives these flows in a certain direction. A refugee who comes to Europe has to make trade-offs in terms of cost and benefits, duration, uncertainty and the multi-staged character of the journey. Real options models are a suitable tool for modelling these kind of decision dynamics. On the basis of a case-study, that compares three routes from Syria to Europe, we demonstrate how well the real options analysis is in line with the development of the refugee flows.

Automated summary

In 2015, the EU and its member countries faced significant challenges in dealing with the unprecedented arrival of refugees in Europe. Understanding the factors that drive these refugee flows is crucial for better management. Real options models prove to be an effective tool in analyzing the decision dynamics of refugees considering cost and benefits, duration, uncertainty, and the multi-staged nature of their journey. Through a case-study comparing three routes from Syria to Europe, the real options analysis is shown to align well with the development of refugee flows.