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Justifying a high-speed rail project: social value vs. regional growth


  • Fernand Martin

    () (Department of Economics, UniversitÊ de MontrÊal, C.P. 6128 Succursale Centre-ville, MontrÊal, QuÊbec, Canada, H3C3J7)


This article establishes a relationship between the net present value (NPV) of a High-Speed Rail (HSR) project and its social value, its transportation consumers` surplus (TCS) and its regional economic impact in terms of growth. First, it is shown that if the NPV is positive, it may generate growth even if no bottleneck exists. Second, when shadow-pricing and externalities are included in the calculations, and the HSR demand has been forecasted by a multinomial logit model, the NPV differs from its net economic impact. For instance, one variant of the project, though acceptable, reduces growth elsewhere in the economy. Decision-making is then in a quandary.

Suggested Citation

  • Fernand Martin, 1997. "Justifying a high-speed rail project: social value vs. regional growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(2), pages 155-174.
  • Handle: RePEc:spr:anresc:v:31:y:1997:i:2:p:155-174
    Note: Received: April 1996 / Accepted: May 1996

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    Cited by:

    1. 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.

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