IDEAS home Printed from https://ideas.repec.org/a/kap/transp/v42y2015i2p277-302.html
   My bibliography  Save this article

Managing the insolvable limitations of cost-benefit analysis: results of an interview based study

Author

Listed:
  • Niek Mouter
  • Jan Annema
  • Bert Wee

Abstract

Cost-benefit analysis (CBA) has been an important tool for transport planners for several decades. Despite its popularity it has often been criticized for several reasons, amongst other things, because the tool has some insolvable limitations when it is applied in practice. In this paper we examine and scrutinize the perceptions of 86 key actors in the Dutch appraisal practice for spatial-infrastructure projects with regard to three insolvable CBA limitations: (1) CBA is always incomplete; (2) Effect estimations are always uncertain; (3) Effects that are difficult to estimate have a relatively weak position. We conclude that Dutch key actors were not only able to point out these three CBA limitations and the bad management of these limitations, but they were also able to propose several (pragmatic) solutions to improve the management of CBA limitations. This paper discusses how the proposed solutions relate to solutions addressed in the literature. Moreover, we provide recommendations for further research and discuss policy recommendations that transpired from the results. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Niek Mouter & Jan Annema & Bert Wee, 2015. "Managing the insolvable limitations of cost-benefit analysis: results of an interview based study," Transportation, Springer, vol. 42(2), pages 277-302, March.
    • Handle: RePEc:kap:transp:v:42:y:2015:i:2:p:277-302
    DOI: 10.1007/s11116-014-9539-0
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11116-014-9539-0
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11116-014-9539-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nikolaos Thomopoulos & Susan Grant-Muller, 2013. "Incorporating equity as part of the wider impacts in transport infrastructure assessment: an application of the SUMINI approach," Transportation, Springer, vol. 40(2), pages 315-345, February.
    2. Thomopoulos, N. & Grant-Muller, S. & Tight, M.R., 2009. "Incorporating equity considerations in transport infrastructure evaluation: Current practice and a proposed methodology," Evaluation and Program Planning, Elsevier, vol. 32(4), pages 351-359, November.
    3. Thomopoulos, Nikolaos & Grant-Muller, Susan, 2013. "Incorporating equity as part of the wider impacts in transport infrastructure assessment: an application of the SUMINI approach," LSE Research Online Documents on Economics 60073, London School of Economics and Political Science, LSE Library.
    4. Robin Boadway, 2006. "Principles of Cost-Benefit Analysis," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 2(1), pages 1-44, January.
    5. Salling, Kim Bang & Banister, David, 2009. "Assessment of large transport infrastructure projects: The CBA-DK model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 800-813, November.
    6. Karel Martens, 2011. "Substance precedes methodology: on cost–benefit analysis and equity," Transportation, Springer, vol. 38(6), pages 959-974, November.
    7. Campbell,Harry F. & Brown,Richard P. C., 2003. "Benefit-Cost Analysis," Cambridge Books, Cambridge University Press, number 9780521528986.
    8. Mackie, Peter & Preston, John, 1998. "Twenty-one sources of error and bias in transport project appraisal," Transport Policy, Elsevier, vol. 5(1), pages 1-7, January.
    9. Sen, Amartya, 2000. "The Discipline of Cost-Benefit Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 931-952, June.
    10. Gerard Jong & Andrew Daly & Marits Pieters & Stephen Miller & Ronald Plasmeijer & Frank Hofman, 2007. "Uncertainty in traffic forecasts: literature review and new results for The Netherlands," Transportation, Springer, vol. 34(4), pages 375-395, July.
    11. Peter Mackie, 2010. "Cost-Benefit Analysis in Transport: A UK Perspective," OECD/ITF Joint Transport Research Centre Discussion Papers 2010/16, OECD Publishing.
    12. Hayashi, Y. & Morisugi, H., 2000. "International comparison of background concept and methodology of transportation project appraisal," Transport Policy, Elsevier, vol. 7(1), pages 73-88, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mouter, Niek & Cabral, Manuel Ojeda & Dekker, Thijs & van Cranenburgh, Sander, 2019. "The value of travel time, noise pollution, recreation and biodiversity: A social choice valuation perspective," Research in Transportation Economics, Elsevier, vol. 76(C).
    2. Francis Marleau Donais & Irène Abi-Zeid & E. Owen D. Waygood & Roxane Lavoie, 2019. "A review of cost–benefit analysis and multicriteria decision analysis from the perspective of sustainable transport in project evaluation," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(3), pages 327-358, November.
    3. Yunqiang Xue & Hongzhi Guan & Jonathan Corey & Heng Wei & Hai Yan, 2017. "Quantifying a Financially Sustainable Strategy of Public Transport: Private Capital Investment Considering Passenger Value," Sustainability, MDPI, vol. 9(2), pages 1-20, February.
    4. Becker, Nir & Kimhi, Ayal & Argaman, Eli, 2020. "Costs and benefits of waste soils removal," Land Use Policy, Elsevier, vol. 99(C).
    5. Niek Mouter & Paul Koster & Thijs Dekker, 2019. "An introduction to Participatory Value Evaluation," Tinbergen Institute Discussion Papers 19-024/V, Tinbergen Institute, revised 15 Dec 2019.
    6. Yunqiang Xue & Hongzhi Guan & Jonathan Corey & Bing Zhang & Hai Yan & Yan Han & Huanmei Qin, 2017. "Transport Emissions and Energy Consumption Impacts of Private Capital Investment in Public Transport," Sustainability, MDPI, vol. 9(10), pages 1-19, October.
    7. Mouter, Niek, 2017. "Dutch politicians’ attitudes towards Cost-Benefit Analysis," Transport Policy, Elsevier, vol. 54(C), pages 1-10.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mouter, Niek & Annema, Jan Anne & Wee, Bert van, 2013. "Attitudes towards the role of Cost–Benefit Analysis in the decision-making process for spatial-infrastructure projects: A Dutch case study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 58(C), pages 1-14.
    2. Nahmias–Biran, Bat-hen & Shiftan, Yoram, 2016. "Towards a more equitable distribution of resources: Using activity-based models and subjective well-being measures in transport project evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 672-684.
    3. Mouter, Niek & Annema, Jan Anne & van Wee, Bert, 2013. "Ranking the substantive problems in the Dutch Cost–Benefit Analysis practice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 241-255.
    4. Karen Lucas & Bert Wee & Kees Maat, 2016. "A method to evaluate equitable accessibility: combining ethical theories and accessibility-based approaches," Transportation, Springer, vol. 43(3), pages 473-490, May.
    5. Gallo, Mariano, 2018. "Improving equity of urban transit systems with the adoption of origin-destination based taxi fares," Socio-Economic Planning Sciences, Elsevier, vol. 64(C), pages 38-55.
    6. Kaplan, Sigal & Popoks, Dmitrijs & Prato, Carlo Giacomo & Ceder, Avishai (Avi), 2014. "Using connectivity for measuring equity in transit provision," Journal of Transport Geography, Elsevier, vol. 37(C), pages 82-92.
    7. Barfod, Michael Bruhn & Salling, Kim Bang, 2015. "A new composite decision support framework for strategic and sustainable transport appraisals," Transportation Research Part A: Policy and Practice, Elsevier, vol. 72(C), pages 1-15.
    8. Francis Marleau Donais & Irène Abi-Zeid & E. Owen D. Waygood & Roxane Lavoie, 2019. "A review of cost–benefit analysis and multicriteria decision analysis from the perspective of sustainable transport in project evaluation," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(3), pages 327-358, November.
    9. Mouter, Niek & Cabral, Manuel Ojeda & Dekker, Thijs & van Cranenburgh, Sander, 2019. "The value of travel time, noise pollution, recreation and biodiversity: A social choice valuation perspective," Research in Transportation Economics, Elsevier, vol. 76(C).
    10. Nikolaos Thomopoulos & Susan Grant-Muller, 2013. "Incorporating equity as part of the wider impacts in transport infrastructure assessment: an application of the SUMINI approach," Transportation, Springer, vol. 40(2), pages 315-345, February.
    11. Saud, Veronica & Thomopoulos, Nikolas, 2021. "Towards inclusive transport landscapes: Re-visualising a Bicycle Sharing Scheme in Santiago Metropolitan Region," Journal of Transport Geography, Elsevier, vol. 92(C).
    12. Asplund, Disa & Eliasson, Jonas, 2016. "Does uncertainty make cost-benefit analyses pointless?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 195-205.
    13. Nurmi, Väinö & Ahtiainen, Heini, 2018. "Distributional Weights in Environmental Valuation and Cost-benefit Analysis: Theory and Practice," Ecological Economics, Elsevier, vol. 150(C), pages 217-228.
    14. Paolo Rosasco & Leopoldo Sdino, 2023. "The Social Sustainability of the Infrastructures: A Case Study in the Liguria Region," Land, MDPI, vol. 12(2), pages 1-27, January.
    15. Linovski, Orly & Baker, Dwayne Marshall & Manaugh, Kevin, 2018. "Equity in practice? Evaluations of equity in planning for bus rapid transit," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 75-87.
    16. David Hartgen, 2013. "Hubris or humility? Accuracy issues for the next 50 years of travel demand modeling," Transportation, Springer, vol. 40(6), pages 1133-1157, November.
    17. Mouter, Niek & Koster, Paul & Dekker, Thijs, 2021. "Contrasting the recommendations of participatory value evaluation and cost-benefit analysis in the context of urban mobility investments," Transportation Research Part A: Policy and Practice, Elsevier, vol. 144(C), pages 54-73.
    18. Dimitriou, Harry T. & Ward, E. John & Dean, Marco, 2016. "Presenting the case for the application of multi-criteria analysis to mega transport infrastructure project appraisal," Research in Transportation Economics, Elsevier, vol. 58(C), pages 7-20.
    19. Sharma, Gajanand & Patil, Gopal R., 2021. "Public transit accessibility approach to understand the equity for public healthcare services: A case study of Greater Mumbai," Journal of Transport Geography, Elsevier, vol. 94(C).
    20. Börjesson, Maria & Jonsson , Daniel & Berglund, Svante & Almström , Peter, 2013. "Land-use impacts in transport appraisal," Working papers in Transport Economics 2013:32, CTS - Centre for Transport Studies Stockholm (KTH and VTI).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:transp:v:42:y:2015:i:2:p:277-302. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.