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Cost-Benefit Analysis for Transport Networks: Theory and Application

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  • Yukihiro Kidokoro

Abstract

Practical methods for estimating benefits corresponding to second-best situation are derived by modelling a congestion-prone transport network explicitly. A change in total benefit of an investment in transport infrastructure can be calculated in three ways: (a) the sum of the changes in consumers' and producers' surpluses in all routes; (b) the sum of the changes in consumers' and producers' surpluses in the invested routes, plus the change in the deadweight loss in all other routes; and (c) the change in the total benefits in the first-best case a change in the deadweight loss in all routes. Applying method (c), the author demonstrates that the final benefits of distortion-relieving policies are simply the sum of a change in the deadweight loss in all routes. Theoretical results are derived in practically useful forms, and then illustrated with examples. © The London School of Economics and the University of Bath 2004

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Bibliographic Info

Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy.

Volume (Year): 38 (2004)
Issue (Month): 2 (May)
Pages: 275-307

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Handle: RePEc:tpe:jtecpo:v:38:y:2004:i:2:p:275-307

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Web page: http://www.bath.ac.uk/e-journals/jtep

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Cited by:
  1. Pilegaard, Ninette & Fosgerau, Mogens, 2008. "Cost benefit-analysis of a transport improvement in the case of search unemployment," MPRA Paper 10037, University Library of Munich, Germany.
  2. Edward Calthrop & Bruno De Borger & Stef Proost, 2008. "Cost-benefit analysis of transport investments in distorted economies," Center for Economic Studies - Discussion papers ces0818, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  3. Kidokoro, Yukihiro, 2006. "Regulatory reform and the congestion of urban railways," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 52-73, January.
  4. Maarten van 't Riet, 2011. "The link approach to measuring consumer surplus in transport networks," CPB Discussion Paper 199, CPB Netherlands Bureau for Economic Policy Analysis.
  5. Paul Besseling & Maarten van 't Riet, 2009. "Welfare analysis in transport networks," CPB Discussion Paper 130, CPB Netherlands Bureau for Economic Policy Analysis.

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