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Is Investment in High Speed Rail Socially Profitable?

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  • Ginés de Rus
  • Gustavo Nombela

Abstract

The development of High Speed Rail (HSR) in Europe has been encouraged, and financially supported, by the European Commission. HSR technology is presented as a solution to congested roads and airports and as an efficient response for incremental demand in the coming years. However, the case for an HSR investment project is highly dependent on the existing volume of demand in the affected corridor. Using real construction, maintenance, and rolling stock costs of the European HSR lines in operation, potential time savings, standard values of time and expected demand growth, we estimate the minimum level of demand required from which investment in HSR could be considered profitable from a social perspective. Other benefits, such as providing long-term capacity where overcrowding is expected, could reduce the minimum demand thresholds reported in this paper. © 2007 LSE and the University of Bath

Suggested Citation

  • 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.
  • Handle: RePEc:tpe:jtecpo:v:41:y:2007:i:1:p:3-23
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    Cited by:

    1. De Rus, Ginés, 2011. "The BCA of HSR: Should the Government Invest in High Speed Rail Infrastructure?," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 2(01), pages 1-28, January.
    2. Nicole Adler & Chris Nash & Eric Pels, 2008. "High-Speed Rail & Air Transport Competition," Tinbergen Institute Discussion Papers 08-103/3, Tinbergen Institute.
    3. Castillo-Manzano, José I. & Pedregal, Diego J. & Pozo-Barajas, Rafael, 2016. "An econometric evaluation of the management of large-scale transport infrastructure in Spain during the great recession: Lessons for infrastructure bubbles," Economic Modelling, Elsevier, vol. 53(C), pages 302-313.
    4. Stef Proost & Jacques-Francois Thisse, 2017. "What Can Be Learned from Spatial Economics?," HSE Working papers WP BRP 167/EC/2017, National Research University Higher School of Economics.
    5. 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.
    6. Crozet, Yves & Chassagne, Florian, 2013. "Rail access charges in France: Beyond the opposition between competition and financing," Research in Transportation Economics, Elsevier, vol. 39(1), pages 247-254.
    7. Dobruszkes, Frédéric & Dehon, Catherine & Givoni, Moshe, 2014. "Does European high-speed rail affect the current level of air services? An EU-wide analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 461-475.
    8. repec:eee:trapol:v:59:y:2017:i:c:p:181-195 is not listed on IDEAS
    9. Marie Delaplace & Sylvie Bazin & christophe Beckerich & Corinne Blanquart, 2011. "High speed Rail service and local economic development, a review," ERSA conference papers ersa10p167, European Regional Science Association.
    10. Michael B. Charles & Neal Ryan & Robbert A. Kivits, 2012. "Moving towards sustainable intercity transport: a case study of high-speed rail in Australia," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 15(1/2), pages 125-147.
    11. Thomas Ehrmann & Karl-Hans Hartwig & Torsten Marner & Hendrik Schmale, 2009. "Specific Investments and Ownership Structures in Railways – An Experimental Analysis," Working Papers 12, Institute of Transport Economics, University of Muenster.
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    13. Socorro, M. Pilar & Viecens, M. Fernanda, 2013. "The effects of airline and high speed train integration," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 160-177.
    14. Ginés de Rus & M. Pilar Socorro, 2012. "Access pricing and investment in vertical structures with complementary or rival facilities," Working Papers 2012-06, FEDEA.
    15. Salvador Bertomeu & Antonio Estache, 2016. "Unbundling Political and Economic Rationality: a Non-Parametric Approach Tested on Spain," Working Papers ECARES ECARES 2016-17, ULB -- Universite Libre de Bruxelles.
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    17. de Rus, Ginés & Socorro, M. Pilar, 2014. "Access pricing, infrastructure investment and intermodal competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 374-387.
    18. Proost, Stef & Thisse, Jacques-François, 2015. "Skilled Cities, Regional Disparities, and Efficient Transport: The state of the art and a research agenda," CEPR Discussion Papers 10790, C.E.P.R. Discussion Papers.
    19. Chen, Zhenhua & Xue, Junbo & Rose, Adam Z. & Haynes, Kingsley E., 2016. "The impact of high-speed rail investment on economic and environmental change in China: A dynamic CGE analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 232-245.
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    23. Betancor, Ofelia., 2011. "Estudio de las posibilidades de implantación de sistemas intermodales: el Caso Málaga," Economic Reports 07-2011, FEDEA.

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