The Economic Effects of High Speed Rail Investment
AbstractThe allocation of traffic between different transport modes follows transport user decisions which depend on the generalized cost of travel in the available alternatives. High Speed Rail (HSR) investment is a government decision with significant effects on the generalized cost of rail transport; and therefore on the modal split in corridors where private operators compete for traffic and charge prices close to total producer costs (infrastructure included). The rationale for HSR investment is not different to any other public investment decision. Public funds should be allocated to this mode of transport if its net expected social benefit is higher than in the next best alternative. The exam of data on costs and demand shows that the case for investing in HSR is strongly dependent on the existing volume of traffic where the new lines are built, the expected time savings and generated traffic and the average willingness to pay of potential users, the release of capacity in congested roads, airports or conventional rail lines and the net reduction of external effects. This paper discusses, within a cost-benefit analysis framework, under which conditions the expected benefits from deviated traffic (plus generated traffic), and other alleged external effects and indirect benefits justify the investment in HSR projects. It pays special attention to intermodal effects and pricing.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by OECD Publishing in its series OECD/ITF Joint Transport Research Centre Discussion Papers with number 2008/16.
Date of creation: Aug 2008
Date of revision:
investment; railways; cost-benefit analysis;
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Campos, Javier & de Rus, Ginés, 2009. "Some stylized facts about high-speed rail: A review of HSR experiences around the world," Transport Policy, Elsevier, vol. 16(1), pages 19-28, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.