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Is CBA ranking of transport investments robust?

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  • Börjesson, Maria

    ()
    (KTH)

  • Eliasson, Jonas

    ()
    (KTH)

  • Lundberg, Mattias

Abstract

Cost-benefit analysis (CBA) is often used when many transport investments need to be ranked against each other, for example in national investment planning. However, results are often questioned on claims that the ranking depends crucially on uncertain assumptions about the future, and on methodologically or ethically contestable trade-offs of different types of benefits relative to each other. This paper explores the robustness of CBA rankings of transport investments with respect to two types of uncertainties: relative benefit valuations and scenario assumptions related to car ownership, characteristics and costs. The study is based on CBAs of 479 suggested road and rail investments in Sweden that have been shortlisted for possible inclusion in the national transport investment plan. The CBA ranking turns out to be robust to variations in the studied scenario assumptions. The CBA ranking also turns out to be robust to changes in the relative valuations of different types of benefits – person travel time savings, traffic safety, emissions and freight benefits. We also compare two sets of travel time valuations against each other, one of which differentiated with respect to mode and travel purpose and one which is not, again concluding that the investment ranking is robust.

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File URL: http://www.transportportal.se/SWoPEc/CTS2012-30.pdf
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Bibliographic Info

Paper provided by CTS - Centre for Transport Studies Stockholm (KTH and VTI) in its series Working papers in Transport Economics with number 2012:30.

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Length: 14 pages
Date of creation: 21 Dec 2012
Date of revision:
Publication status: Published as Börjesson, Maria, Jonas Eliasson and Mattias Lundberg, 'Is CBA ranking of transport investments robust?' in Journal of Transport Economics and Policy, 2014, pages 189-204.
Handle: RePEc:hhs:ctswps:2012_030

Contact details of provider:
Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Web page: http://www.cts.kth.se/

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Keywords: Cost benefit analysis; Appraisal; Robustness; Decision support.;

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  1. Rodier, Caroline J. & Johnston, Robert A., 2002. "Uncertain socioeconomic projections used in travel demand and emissions models: could plausible errors result in air quality nonconformity?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(7), pages 613-631, August.
  2. Hugosson, Muriel Beser, 2005. "Quantifying uncertainties in a national forecasting model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(6), pages 531-547, July.
  3. Yong Zhao & Kara Maria Kockelman, 2002. "The propagation of uncertainty through travel demand models: An exploratory analysis," The Annals of Regional Science, Springer, vol. 36(1), pages 145-163.
  4. Bristow, A. L. & Nellthorp, J., 2000. "Transport project appraisal in the European Union," Transport Policy, Elsevier, vol. 7(1), pages 51-60, January.
  5. Robert Bain, 2009. "Error and optimism bias in toll road traffic forecasts," Transportation, Springer, vol. 36(5), pages 469-482, September.
  6. Parthasarathi, Pavithra & Levinson, David, 2010. "Post-construction evaluation of traffic forecast accuracy," Transport Policy, Elsevier, vol. 17(6), pages 428-443, November.
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