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The BCA of HSR Should the government invest in high speed rail infrastructure?

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  • De Rus, Ginés

Abstract

This paper deals with public investment in High Speed Rail (HSR) infrastructure and tries to understand the economic rationale for allocating public money to the construction of new HSR lines. The exam of data on costs and demand shows that the case for investing in HSR requires several conditions to be met: an ex ante high volume of traffic in the corridor where the new line is built, significant time savings, high average willingness to pay of potential users, the release of capacity in the conventional rail network and airports. On the contrary, net environmental benefits seem to be insignificant as to influence the social desirability of HSR investment. This paper discusses, within a cost-benefit analysis framework, under which conditions the expected benefits could justify the investment in HSR projects.

Suggested Citation

  • De Rus, Ginés, 2011. "The BCA of HSR Should the government invest in high speed rail infrastructure?," Working Papers 2011-12, FEDEA.
  • Handle: RePEc:fda:fdaddt:2011-12
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    References listed on IDEAS

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    1. Kingsley E. Haynes, 1997. "Labor markets and regional transportation improvements: the case of high-speed trains An introduction and review," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 57-76.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. High-speed rail: when should governments invest?
      by Dave Simpson in hand picked... and carefully sorted on 2012-01-10 15:30:32

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    1. repec:eee:trapol:v:59:y:2017:i:c:p:181-195 is not listed on IDEAS
    2. Hultkrantz, Lars & A. Krüger, Niclas & Mantalos, Panagiotis, 2014. "Risk-adjusted long-term social rates of discount for transportation infrastructure investment," Research in Transportation Economics, Elsevier, vol. 47(C), pages 70-81.
    3. Ginés de Rus, 2014. "The economic evaluation of infrastructure investment. Some inescapable tradeoffs," Working Papers 2014-16, FEDEA.
    4. 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.
    5. 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.
    6. Jiang, Changmin & Zhang, Anming, 2014. "Effects of high-speed rail and airline cooperation under hub airport capacity constraint," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 33-49.
    7. 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.
    8. World Bank, 2014. "Regional Economic Impact Analysis of High Speed Rail in China : Main Report," World Bank Other Operational Studies 19996, The World Bank.
    9. Daniel Albalate & Javier Campos & Juan Luis Jiménez, 2015. "“Tourism and high speed rail in Spain: Does the AVE increase local visitors?”," IREA Working Papers 201527, University of Barcelona, Research Institute of Applied Economics, revised Dec 2015.

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