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Does Benefit-Cost Efficiency Influence Transport Investment Decisions?

Author

Listed:
  • Jonas Eliasson
  • Maria Börjesson
  • James Odeck
  • Morten Welde

Abstract

We explore how benefit-cost efficiency and electoral support affect road investment decisions in Sweden and Norway. In Norway, neither benefits nor costs seem to affect project selection. In Sweden, civil servants' decisions are strongly affected by projects' benefit-cost ratios, with a stronger effect for more expensive projects, while politicians' decisions are only weakly affected, and only for small projects. In both countries, governments tend to favour investments in regions where they enjoy strong local electoral support. Using cost efficiency as a final selection criterion seems to filter out many inefficient projects already at an early stage of the planning process. © 2015 LSE and the University of Bath

Suggested Citation

  • Jonas Eliasson & Maria Börjesson & James Odeck & Morten Welde, 2015. "Does Benefit-Cost Efficiency Influence Transport Investment Decisions?," Journal of Transport Economics and Policy, University of Bath, vol. 49(3), pages 377-396, July.
    • Handle: RePEc:tpe:jtecpo:v:49:y:2015:i:3:p:377-396
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    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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