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Cost-Benefit Analysis for Transport Networks: Theory and Application

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  • Yukihiro Kidokoro

Abstract

Practical methods for estimating benefits corresponding to second-best situation are derived by modelling a congestion-prone transport network explicitly. A change in total benefit of an investment in transport infrastructure can be calculated in three ways: (a) the sum of the changes in consumers' and producers' surpluses in all routes; (b) the sum of the changes in consumers' and producers' surpluses in the invested routes, plus the change in the deadweight loss in all other routes; and (c) the change in the total benefits in the first-best case a change in the deadweight loss in all routes. Applying method (c), the author demonstrates that the final benefits of distortion-relieving policies are simply the sum of a change in the deadweight loss in all routes. Theoretical results are derived in practically useful forms, and then illustrated with examples. © The London School of Economics and the University of Bath 2004

Suggested Citation

  • Yukihiro Kidokoro, 2004. "Cost-Benefit Analysis for Transport Networks: Theory and Application," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 275-307, May.
  • Handle: RePEc:tpe:jtecpo:v:38:y:2004:i:2:p:275-307
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    Cited by:

    1. Rich, Jeppe & Nielsen, Otto Anker, 2007. "A socio-economic assessment of proposed road user charging schemes in Copenhagen," Transport Policy, Elsevier, vol. 14(4), pages 330-345, July.
    2. Yoshitsugu Kanemoto, 2011. "Surplus Theory," Chapters,in: A Handbook of Transport Economics, chapter 20 Edward Elgar Publishing.
    3. Eliasson, Jonas & Fosgerau, Mogens, 2017. "Cost-benefit analysis of transport improvements in the presence of spillovers, matching and an income tax," MPRA Paper 76526, University Library of Munich, Germany.
    4. Grimaldi, Raffaele & Beria, Paolo, 2013. "Open issues in the practice of cost benefit analysis of transport projects," MPRA Paper 53766, University Library of Munich, Germany.
    5. Ninette Pilegaard & Mogens Fosgerau, 2008. "Cost Benefit Analysis of a Transport Improvement in the Case of Search Unemployment," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 23-42, January.
    6. 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.
    7. Kidokoro, Yukihiro, 2006. "Regulatory reform and the congestion of urban railways," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 52-73, January.
    8. Beria, Paolo & Grimaldi, Raffaele, 2013. "Appraising the benefits of bottleneck removal in rail transport: a simplified CBA approach," MPRA Paper 46889, University Library of Munich, Germany.
    9. Melendez-Hidalgo, Jose & Rietveld, Piet & Verhoef, Erik, 2007. "On the change in surpluses equivalence: measuring benefits from transport infrastructure investments," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 36, pages 107-140.
    10. 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.
    11. Knudsen, M.Aa. & Rich, J., 2013. "Ex post socio-economic assessment of the Oresund Bridge," Transport Policy, Elsevier, vol. 27(C), pages 53-65.
    12. repec:mul:je8794:doi:10.1429/34355:y:2011:i:1:p:125 is not listed on IDEAS
    13. Stef Proost & Fay Dunkerley & Saskia Loo & Nicole Adler & Johannes Bröcker & Artem Korzhenevych, 2014. "Do the selected Trans European transport investments pass the cost benefit test?," Transportation, Springer, vol. 41(1), pages 107-132, January.
    14. Paul Besseling & Maarten van 't Riet, 2009. "Welfare analysis in transport networks," CPB Discussion Paper 130, CPB Netherlands Bureau for Economic Policy Analysis.

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