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Cost – benefit analysis and large-scale infrastructure projects: state of the art and challenges


  • Roger Vickerman


In this paper I review the problems surrounding the use of cost – benefit analysis (CBA) in the appraisal of large-scale infrastructure projects. I define the requirements of a best-practice transport CBA and show the difficulties in achieving these for large-scale projects. The main difficulties discussed are those of forecasting over long time periods, dealing with imperfect competition in transport-using sectors to obtain estimations of wider transport benefits, introducing private finance and appraising network effects. I conclude that CBA can remain a valuable tool as part of the appraisal process but that the inputs to a CBA have to be carefully assessed, and complementary approaches, such as computable general equilibrium modelling, have a useful role to play for very large or network projects.

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  • Roger Vickerman, 2007. "Cost – benefit analysis and large-scale infrastructure projects: state of the art and challenges," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 34(4), pages 598-610, July.
  • Handle: RePEc:pio:envirb:v:34:y:2007:i:4:p:598-610

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    References listed on IDEAS

    1. Fanny Missfeldt & Arturo Villavicenco, 2000. "The economies in transition as part of the climate regime: recent developments," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 27(3), pages 379-392, May.
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    Cited by:

    1. José Manuel Naranjo Gómez, 2016. "Impacts on the Social Cohesion of Mainland Spain’s Future Motorway and High-Speed Rail Networks," Sustainability, MDPI, Open Access Journal, vol. 8(7), pages 1-22, July.
    2. Holz-Rau, Christian & Scheiner, Joachim, 2011. "Safety and travel time in cost-benefit analysis: A sensitivity analysis for North Rhine-Westphalia," Transport Policy, Elsevier, vol. 18(2), pages 336-346, March.
    3. repec:eee:trapol:v:58:y:2017:i:c:p:80-87 is not listed on IDEAS
    4. Vickerman, Roger, 2008. "Transit investment and economic development," Research in Transportation Economics, Elsevier, vol. 23(1), pages 107-115, January.
    5. Thijssen, Jacco J.J., 2015. "A model for irreversible investment with construction and revenue uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 250-266.
    6. Thomopoulos, N. & Grant-Muller, S. & Tight, M.R., 2009. "Incorporating equity considerations in transport infrastructure evaluation: Current practice and a proposed methodology," Evaluation and Program Planning, Elsevier, vol. 32(4), pages 351-359, November.
    7. Nahmias–Biran, Bat-hen & Shiftan, Yoram, 2016. "Towards a more equitable distribution of resources: Using activity-based models and subjective well-being measures in transport project evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 672-684.
    8. Chong, Uven & Hopkins, Omar, 2016. "An international experience on the evolution of road costs during the project life cycle," Transport Policy, Elsevier, vol. 48(C), pages 60-66.

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