IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00068313.html

Ranking Transport Projects by their Socioeconomic Value or Financial Interest Rate of Return?

Author

Listed:
  • Alain Bonnafous

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

  • Pablo Jensen

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, LPMCN - Laboratoire de Physique de la Matière Condensée et Nanostructures - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - CNRS - Centre National de la Recherche Scientifique, Phys-ENS - Laboratoire de Physique de l'ENS Lyon - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper discusses the choice by the public authority of the most efficient programme of infrastructure investments. More specifically, it studies the optimal ranking of project implementation when these projects are partially self-financed by their own revenues such as tolled highways. In this case, the optimal investment programme must be defined under a constraint of annual subsidies. This paper demonstrates that the optimal ranking is not necessarily the ranking of decreasing socioeconomic IRR. This counter-intuitive result can be demonstrated by a general approach. Analytical calculations are not useful in this discrete problem because each programme is an ordered subset of projects. Therefore, there is no continuous variation linking the various programmes and the usual tools of optimization, such as differential calculus, are useless. Thus, we adopt here a discrete optimization analysis based on standard techniques in the physics area, such as Monte Carlo sampling.

Suggested Citation

  • Alain Bonnafous & Pablo Jensen, 2005. "Ranking Transport Projects by their Socioeconomic Value or Financial Interest Rate of Return?," Post-Print halshs-00068313, HAL.
    • Handle: RePEc:hal:journl:halshs-00068313
    DOI: 10.1016/j.tranpol.2004.12.003
    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
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Musso, Enrico & Ferrari, Claudio & Benacchio, Marco, 2006. "Port Investment: Profitability, Economic Impact and Financing," Research in Transportation Economics, Elsevier, vol. 16(1), pages 171-218, January.
    2. Mandic, Dragomir & Jovanovic, Predrag & Bugarinovic, Mirjana, 2014. "Two-phase model for multi-criteria project ranking: Serbian Railways case study," Transport Policy, Elsevier, vol. 36(C), pages 88-104.
    3. Bonnafous, Alain, 2010. "Programming, optimal pricing and partnership contract for infrastructures in PPPs," Research in Transportation Economics, Elsevier, vol. 30(1), pages 15-22.
    4. Alain Bonnafous & Pablo Jensen & William Roy, 2006. "Le cofinancement usager - contribuable et le partenariat public-privé changent les termes de l'évaluation des programmes d'investissement public," Economie & Prévision, La Documentation Française, vol. 0(4), pages 15-30.
    5. Bertsch, Valentin & Di Cosmo, Valeria, "undated". "Are Renewables Profitable in 2030? A Comparison between Wind and Solar across Europe," ESP: Energy Scenarios and Policy 276178, Fondazione Eni Enrico Mattei (FEEM).
    6. Bonnafous, Alain, 2015. "The economic regulation of French highways: Just how private did they become?," Transport Policy, Elsevier, vol. 41(C), pages 33-41.
    7. Beria, Paolo & Grimaldi, Raffaele, 2014. "Cost Benefit Analysis to assess urban mobility plans. Consumers’ surplus calculation and integration with transport models," MPRA Paper 59590, University Library of Munich, Germany.
    8. Bernard Lapeyre & Emile Quinet, 2017. "A Simple GDP-based Model for Public Investments at Risk," Post-Print hal-01666574, HAL.
    9. Bonnafous, Alain, 2012. "The use of PPP's and the profitability rate paradox," Research in Transportation Economics, Elsevier, vol. 36(1), pages 45-49.
    10. Acharya, Bikram & Lee, Jongsu & Moon, HyungBin, 2022. "Preference heterogeneity of local government for implementing ICT infrastructure and services through public-private partnership mechanism," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    11. Alain Bonnafous, 2006. "Financing future growth in infrastructure needs," Post-Print halshs-00339710, HAL.
    12. William Roy, 2005. "Évaluation des programmes d'infrastructure : ordre optimal de réalisation sous contrainte financière," Post-Print halshs-00003971, HAL.
    13. Mishra, Sabyasachee & Khasnabis, Snehamay & Dhingra, Sunder Lall, 2013. "A simulation approach for estimating value at risk in transportation infrastructure investment decisions," Research in Transportation Economics, Elsevier, vol. 38(1), pages 128-138.
    14. Alain Bonnafous & Bruno Faivre d'Arcier, 2013. "The conditions of efficiency of a PPP for public finances," Post-Print halshs-00876446, HAL.
    15. Lowry, Michael B., 2010. "Using optimization to program projects in the era of communicative rationality," Transport Policy, Elsevier, vol. 17(2), pages 94-101, March.

    More about this item

    Keywords

    ;
    ;
    ;

    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:hal:journl:halshs-00068313. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.