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Do Cost--Benefit Analyses Influence Transport Investment Decisions? Experiences from the Swedish Transport Investment Plan 2010--21

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  • Jonas Eliasson
  • Mattias Lundberg

Abstract

Cost--benefit analysis (CBA) for transport investments is particularly useful for situations where a large number of investments have to be ranked against each other. This study draws on experiences from the development of the Swedish National Transport Investment Plan 2010--21. We study how CBA results were used in the process of shaping the investment plan and what influence they had on investment decisions. In particular, we compare the planners' rankings versus the politicians' rankings. We find that planners' rankings of investments are influenced by benefit--cost ratios (BCRs), in particular for low and moderate BCRs, while the politicians' rankings are not. By interviewing planners about how CBA was used in the process, we clarify what role CBA actually played in the planning process. We find that not only did the CBAs play a role in investment selection, they also forced investment design to be more cost-efficient. Furthermore, we explore planners' implicit valuations, as revealed by their investment selection, finding that freight benefits were implicitly valued higher and traffic safety lower than the officially recommended CBA weights. Finally, we identify the most important areas for improvement of CBA state-of-practice methodology.

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  • Jonas Eliasson & Mattias Lundberg, 2011. "Do Cost--Benefit Analyses Influence Transport Investment Decisions? Experiences from the Swedish Transport Investment Plan 2010--21," Transport Reviews, Taylor & Francis Journals, vol. 32(1), pages 29-48, April.
    • Handle: RePEc:taf:transr:v:32:y:2011:i:1:p:29-48
    DOI: 10.1080/01441647.2011.582541
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    References listed on IDEAS

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    1. Björklund, Gunilla & Swärdh, Jan-Erik, 2015. "Valuing in-vehicle comfort and crowding reduction in public transport," Working papers in Transport Economics 2015:12, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    2. Vigren, Andreas & Ljungberg, Anders, 2018. "Public Transport Authorities’ use of Cost-Benefit Analysis in practice," Research in Transportation Economics, Elsevier, vol. 69(C), pages 560-567.
    3. Hultkrantz, Lars & Svensson, Mikael, 2012. "A Comparison of Benefit Cost and Cost Utility Analysis in Practice: Divergent Policies in Sweden," Karlstad University Working Papers in Economics 1, Karlstad University, Department of Economics.
    4. Börjesson, Maria & Eliasson, Jonas, 2012. "The value of time and external benefits in bicycle appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(4), pages 673-683.
    5. Andersson, Henrik & Hultkrantz, Lars & Lindberg, Gunnar & Nilsson, Jan-Eric, 2017. "The role of economic analysis for investment priorities in Sweden’s transport sector," Working papers in Transport Economics 2017:12, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 23 May 2018.
    6. Björklund, Gunilla & Swärdh, Jan-Erik, 2016. "Valuing in-vehicle comfort and crowding reduction in public transport," Working papers in Transport Economics 2016:2, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    7. Salvador Bertomeu & Antonio Estache, 2016. "Unbundling Political and Economic Rationality: a Non-Parametric Approach Tested on Spain," Working Papers ECARES ECARES 2016-17, ULB -- Universite Libre de Bruxelles.

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