The Economics of Infrastructure Investment: Beyond Simple Cost Benefit Analysis
This non-technical ‘think-piece’ examines aspects of infrastructure project evaluation, concentrating on circumstances that may render a standard cost benefit analysis (CBA) inappropriate. It is designed to make infrastructure investors and planners think deeply about their assumptions and to broaden the range of issues that are taken into account. Issues considered include: the role of CBA; network effects (increasing returns to scale) and the endogeneity of resources within an economy; the valuation of productive versus consumptive benefits; the value of traded versus non-traded sector production; the role and choice of the discount rate; and the importance of considering option values when making infrastructure investment and disinvestment decisions.
|Date of creation:||Aug 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.motu.org.nzEmail:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Arthur Grimes & Yun Liang, 2010. "Bridge to Somewhere: Valuing Auckland's Northern Motorway Extensions," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 44(3), pages 287-315, September.
- Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
- Haughwout, Andrew F., 2002.
"Public infrastructure investments, productivity and welfare in fixed geographic areas,"
Journal of Public Economics,
Elsevier, vol. 83(3), pages 405-428, March.
- Andrew F. Haughwout, 2000. "Public infrastructure investments, productivity and welfare in fixed geographic areas," Staff Reports 104, Federal Reserve Bank of New York.
- Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
- Edward L. Glaeser & Joshua D. Gottlieb, 2009.
"The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States,"
NBER Working Papers
14806, National Bureau of Economic Research, Inc.
- Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
- Andrew Caplin & John Leahy, 2001.
"The social discount rate,"
Discussion Paper / Institute for Empirical Macroeconomics
137, Federal Reserve Bank of Minneapolis.
- Arthur Grimes, 2009. "Capital intensity and welfare: traded and non-trade sector determinants," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(1), pages 21-39.
- Buckle, Robert A. & Kim, Kunhong & Kirkham, Heather & McLellan, Nathan & Sharma, Jarad, 2007. "A structural VAR business cycle model for a volatile small open economy," Economic Modelling, Elsevier, vol. 24(6), pages 990-1017, November.
When requesting a correction, please mention this item's handle: RePEc:mtu:wpaper:10_05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maxine Watene)
If references are entirely missing, you can add them using this form.