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Benefit estimation of transport projects--a representative consumer approach


  • Kidokoro, Yukihiro


In this paper, by focusing on the forms of the utility function of a representative consumer, we explain the three typical models of benefit estimation for transport projects: the basic model, the Wardrop model, and the logit model. The basic model is a representative consumer model with a quasi-linear utility function that is additively separable between numeraire and transport services. The paper clarifies the relationship between these models and derives their implications for benefit estimation. We find that the Wardrop and logit models are special cases of the basic model and that the logit model degenerates to the Wardrop model in a limiting case. Although this relationship implies that one can apply the benefit estimation method for the basic model whatever method is used to estimate transport demand, the Wardrop and logit models have useful features for conducting benefit estimation for new routes.

Suggested Citation

  • Kidokoro, Yukihiro, 2006. "Benefit estimation of transport projects--a representative consumer approach," Transportation Research Part B: Methodological, Elsevier, vol. 40(7), pages 521-542, August.
  • Handle: RePEc:eee:transb:v:40:y:2006:i:7:p:521-542

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    References listed on IDEAS

    1. Williams, H. C. W. L. & Lam, W. M., 1991. "Transport policy appraisal with equilibrium models I: Generated traffic and highway investment benefits," Transportation Research Part B: Methodological, Elsevier, vol. 25(5), pages 253-279, October.
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    6. Choi, Ki-Hong & Moon, Choon-Geol, 1997. "Generalized extreme value model and additively separable generator function," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 129-140.
    7. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
    8. Verboven, Frank, 1996. "The nested logit model and representative consumer theory," Economics Letters, Elsevier, vol. 50(1), pages 57-63, January.
    9. H. C. W. L. Williams & D. Van Vliet & C. Parathira & K. S. Kim, 2001. "Highway Investment Benefits under Alternative Pricing Regimes," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 257-284, May.
    10. Williams, H. C. W. L. & Lam, W. M. & Austin, J. & Kim, K. S., 1991. "Transport policy appraisal with equilibrium models III: Investment benefits in multi-modal systems," Transportation Research Part B: Methodological, Elsevier, vol. 25(5), pages 293-316, October.
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    Cited by:

    1. Yoshitsugu Kanemoto, 2011. "Surplus Theory," Chapters,in: A Handbook of Transport Economics, chapter 20 Edward Elgar Publishing.
    2. Bruno Borger & Stef Proost, 2016. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 934-959, October.
    3. Calthrop, Edward & De Borger, Bruno & Proost, Stef, 2010. "Cost-benefit analysis of transport investments in distorted economies," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 850-869, August.
    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. Eliasson, Jonas & Fosgerau, Mogens, 2017. "Cost-benefit analysis of transport improvements in the presence of spillovers, matching and an income tax," Working papers in Transport Economics 2017:3, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    6. Paul Besseling & Maarten van 't Riet, 2009. "Welfare analysis in transport networks," CPB Discussion Paper 130, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Chang, Hui & Xu, Xiu-Lian & Hu, Chin-Kun & Fu, Chunhua & Feng, Ai-xia & He, Da-Ren, 2014. "A manipulator game model of urban public traffic network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 416(C), pages 378-385.

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