IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-031-35959-0_2.html
   My bibliography  Save this book chapter

Cost–Benefit Analysis of Transport Projects: Theoretical Framework and Practical Rules

In: Economic Evaluation of Transport Projects

Author

Listed:
  • Ginés de Rus

    (University of Las Palmas de Gran Canaria
    University Carlos III of Madrid
    FEDEA)

  • M. Pilar Socorro

    (University of Las Palmas de Gran Canaria)

  • Jorge Valido

    (University of Las Palmas de Gran Canaria)

  • Javier Campos

    (University of Las Palmas de Gran Canaria)

Abstract

Transport projects can be typically contemplated as exogenous interventions in transport markets, which move the economy from one equilibrium to another, commonly through the reduction of the generalized price (composed of monetary price, time, and other disutility components) borne by transport users. This chapter describes two methods for the assessment of the economic effects of any transport project. The first one is based on the aggregation of changes in surpluses. The second one is based on the measurement of the change in willingness to pay and the net social value of the resources used or saved. The analysis is based on a simple model to avoid the mechanical application of rules of thumb from different sources, helping to find some practical ways to avoid common pitfalls and double counting in the measurement of benefits and costs of transport projects. The narrative on how the transport sector works and how government intervention affects social welfare is supported by an analytical approach from which the rules and measurement criteria are derived, always explaining the assumptions and conditions under which they hold.

Suggested Citation

  • Ginés de Rus & M. Pilar Socorro & Jorge Valido & Javier Campos, 2023. "Cost–Benefit Analysis of Transport Projects: Theoretical Framework and Practical Rules," Springer Books, in: Economic Evaluation of Transport Projects, chapter 0, pages 11-42, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-35959-0_2
    DOI: 10.1007/978-3-031-35959-0_2
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mackie, Peter & Worsley, Tom & Eliasson, Jonas, 2014. "Transport appraisal revisited," Research in Transportation Economics, Elsevier, vol. 47(C), pages 3-18.
    2. Schmid, Basil & Molloy, Joseph & Peer, Stefanie & Jokubauskaite, Simona & Aschauer, Florian & Hössinger, Reinhard & Gerike, Regine & Jara-Diaz, Sergio R. & Axhausen, Kay W., 2021. "The value of travel time savings and the value of leisure in Zurich: Estimation, decomposition and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 186-215.
    3. Laird, James J. & Venables, Anthony J., 2017. "Transport investment and economic performance: A framework for project appraisal," Transport Policy, Elsevier, vol. 56(C), pages 1-11.
    4. Peter Mackie & Daniel Graham & James Laird, 2011. "The Direct and Wider Impacts of Transport Projects: A Review," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 21, Edward Elgar Publishing.
    5. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
    6. Paul Collier & Anthony J Venables, 2018. "Who gets the urban surplus?," Journal of Economic Geography, Oxford University Press, vol. 18(3), pages 523-538.
    7. Graham, Daniel J. & Gibbons, Stephen, 2019. "Quantifying Wider Economic Impacts of agglomeration for transport appraisal: Existing evidence and future directions," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    8. Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, University of Bath, vol. 41(2), pages 173-188, May.
    9. Johansson, Per-Olov & de Rus, Gines, 2018. "Evaluating Large Projects when there are Substitutes: Looking for Possible Shortcuts," CERE Working Papers 2018:7, CERE - the Center for Environmental and Resource Economics.
    10. David A. Hensher, 2011. "Valuation of Travel Time Savings," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 7, Edward Elgar Publishing.
    11. Johansson,Per-Olov, 1993. "Cost-Benefit Analysis of Environmental Change," Cambridge Books, Cambridge University Press, number 9780521447928, September.
    12. 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.
    13. Campos, Javier & de Rus, Gines & Barron, Iñaki, 2007. "The cost of building and operating a new high speed rail line," MPRA Paper 12396, University Library of Munich, Germany.
    14. Mohring, Herbert, 1993. "Maximizing, measuring, and not double counting transportation-improvement benefits: A primer on closed- and open-economy cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 27(6), pages 413-424, December.
    15. Ginés de Rus & Per-Olov Johansson, 2019. "Measuring the economic effects of transport improvements," Working Papers 2019-01, FEDEA.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ginés de Rus & Javier Campos & Daniel Graham & M. Pilar Socorro & Jorge Valido, 2020. "Evaluación Económica de Proyectos y Políticas de Transporte: Metodología y Aplicaciones. Parte 1: Metodología para el análisis coste-beneficio de proyectos y políticas de transporte," Working Papers 2020-11, FEDEA.
    2. Hörcher, Daniel & De Borger, Bruno & Seifu, Woubit & Graham, Daniel J., 2020. "Public transport provision under agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    3. Zhou, You & Zhang, Lingzhu & JF Chiaradia, Alain, 2022. "Estimating wider economic impacts of transport infrastructure Investment: Evidence from accessibility disparity in Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 162(C), pages 220-235.
    4. Ginés de Rus & Javier Campos & Armando Ortuno & M. Pilar Socorro & Jorge Valido, 2020. "Evaluación Económica de Proyectos y Políticas de Transporte: Metodología y Aplicaciones Parte 2: Análisis coste-beneficio de proyectos ferroviarios: líneas de alta velocidad y suburbanas," Working Papers 2020-12, FEDEA.
    5. Knudsen, Elias Stapput & Hjorth, Katrine & Pilegaard, Ninette, 2022. "Wages and accessibility – Evidence from Denmark," Transportation Research Part A: Policy and Practice, Elsevier, vol. 158(C), pages 44-61.
    6. Anas, Alex & Chang, Huibin, 2023. "Productivity benefits of urban transportation megaprojects: A general equilibrium analysis of «Grand Paris Express»," Transportation Research Part B: Methodological, Elsevier, vol. 174(C).
    7. Zhu, Jingjing & Xu, Xiangdong & Wang, Zijian, 2023. "Economic evaluation of redundancy design for transportation networks under disruptions: Framework and case study," Transport Policy, Elsevier, vol. 142(C), pages 70-83.
    8. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    9. Robson, Edward N. & Wijayaratna, Kasun P. & Dixit, Vinayak V., 2018. "A review of computable general equilibrium models for transport and their applications in appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 31-53.
    10. Lindsey, Robin, 2012. "Road pricing and investment," Economics of Transportation, Elsevier, vol. 1(1), pages 49-63.
    11. Mackie, Peter & Worsley, Tom & Eliasson, Jonas, 2014. "Transport appraisal revisited," Research in Transportation Economics, Elsevier, vol. 47(C), pages 3-18.
    12. Vickerman, Roger, 2017. "Beyond cost-benefit analysis: the search for a comprehensive evaluation of transport investment," Research in Transportation Economics, Elsevier, vol. 63(C), pages 5-12.
    13. Eliasson, Jonas & Fosgerau, Mogens, 2019. "Cost-benefit analysis of transport improvements in the presence of spillovers, matching and an income tax," Economics of Transportation, Elsevier, vol. 18(C), pages 1-9.
    14. Lee, Jae Kwang, 2021. "Transport infrastructure investment, accessibility change and firm productivity: Evidence from the Seoul region," Journal of Transport Geography, Elsevier, vol. 96(C).
    15. Akihiro Otsuka, 2021. "A new approach to inter‐regional network externalities in Japan," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 1051-1067, June.
    16. Chang, Huibin & Indra, Debarshi & Maiti, Abhradeep, 2023. "Metropolitan area heterogeneity and the impact of road infrastructure improvements on VMT," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    17. Tveter, Eivind & Laird, James J. & Aalen, Peter, 2022. "Spatial aggregation error and agglomeration benefits from transport improvements," Transportation Research Part A: Policy and Practice, Elsevier, vol. 164(C), pages 257-269.
    18. Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
    19. Vickerman, Roger, 2024. "The transport problem: The need for consistent policies on pricing and investment," Transport Policy, Elsevier, vol. 149(C), pages 49-58.
    20. Kenneth Løvold Rødseth & Rasmus Bøgh Holmen & Timo Kuosmanen & Halvor Schøyen, 2023. "Market access and seaport efficiency: the case of container handling in Norway," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-25, December.

    More about this item

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-031-35959-0_2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.