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The BCA of HSR: Should the Government Invest in High Speed Rail Infrastructure?

Listed author(s):
  • De Rus Ginés

    (University of Las Palmas de G.C., Spain, and University Carlos III de Madrid, Spain)

This paper deals with public investment in High-Speed Rail (HSR) infrastructure and tries to understand the economic rationale for allocating public money to the construction of new HSR lines. The examination of data on costs and demand shows that the case for investing in HSR requires several conditions to be met: an ex ante high volume of traffic in the corridor where the new lines are built, significant time savings, high average willingness of potential users to pay, the release of capacity in the conventional rail network and airports. On the contrary, net environmental benefits seem to be insignificant in influencing the social desirability of HSR investment. This paper discusses, within a cost-benefit analysis framework, under which conditions the expected benefits could justify the investment in HSR projects.

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Article provided by De Gruyter in its journal Journal of Benefit-Cost Analysis.

Volume (Year): 2 (2011)
Issue (Month): 1 (January)
Pages: 1-28

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Handle: RePEc:bpj:jbcacn:v:2:y:2011:i:1:n:2
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  1. Vicente Inglada & GinÊs de Rus, 1997. "Cost-benefit analysis of the high-speed train in Spain," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(2), pages 175-188.
  2. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
  3. Roger Vickerman, 1997. "High-speed rail in Europe: experience and issues for future development," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 21-38.
  4. Kingsley E. Haynes, 1997. "Labor markets and regional transportation improvements: the case of high-speed trains An introduction and review," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 57-76.
  5. Per Kageson, 2009. "Environmental Aspects of Inter-City Passenger Transport," OECD/ITF Joint Transport Research Centre Discussion Papers 2009/28, OECD Publishing.
  6. Ginés Rus & M. Socorro, 2010. "Infrastructure Investment and Incentives with Supranational Funding," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(3), pages 551-567, September.
  7. C.A. Nash, 1991. "The case for high speed rail," Investigaciones Economicas, Fundación SEPI, vol. 15(2), pages 337-354, May.
  8. Daniel J. Graham, 2007. "Agglomeration, Productivity and Transport Investment," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 317-343, September.
  9. Rothengatter, Werner, 2003. "How good is first best? Marginal cost and other pricing principles for user charging in transport," Transport Policy, Elsevier, vol. 10(2), pages 121-130, April.
  10. Diego Puga, 2002. "European regional policies in light of recent location theories," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 373-406, October.
  11. Robinson, James A. & Torvik, Ragnar, 2005. "White elephants," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 197-210, February.
  12. Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, University of Bath, vol. 41(2), pages 173-188, May.
  13. Chris Nash & Tom Sansom, 2001. "Pricing European Transport Systems: Recent Developments and Evidence from Case Studies," Journal of Transport Economics and Policy, University of Bath, vol. 35(3), pages 363-380, September.
  14. Natalia Zinovyeva & Manuel F. Bagues, 2010. "Does gender matter for academic promotion? Evidence from a randomized natural experiment," Working Papers 2010-15, FEDEA.
  15. David Gillen & David Levinson & Jean Michel Mathieu & Adib Kanafani, 1997. "The full cost of high-speed rail: an engineering approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(2), pages 189-215.
  16. Vickerman, R W, 1995. "The Regional Impacts of Trans-European Networks," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 237-254, May.
  17. Campos, Javier & de Rus, Gines & Barron, Ignacio, 2007. "A review of HSR experiences around the world," MPRA Paper 12397, University Library of Munich, Germany.
  18. Ginés de Rus & Gustavo Nombela, 2007. "Is Investment in High Speed Rail Socially Profitable?," Journal of Transport Economics and Policy, University of Bath, vol. 41(1), pages 3-23, January.
  19. K. E. Haynes & C. Karlsson & U. Blum, 1997. "Introduction to the special issue The regional and urban effects of high-speed trains," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 1-20.
  20. Nash, Chris, 2003. "Marginal cost and other pricing principles for user charging in transport: a comment," Transport Policy, Elsevier, vol. 10(4), pages 345-348, October.
  21. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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