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In what circumstances is investment in HSR worthwhile?


  • de Rus, Gines
  • Nash, C.A.


The case for building new High Speed Rail (HSR) infrastructure depends its the capacity to generate social benefits which compensate for the construction, maintenance and operation costs. Decisions to invest in this technology have not always been based on sound economic analysis. A mix of arguments, besides time savings –strategic considerations, environmental effects, regional development and so forth– have often been used with inadequate evidence to support them. We have explored under what conditions net welfare gains can be expected from new HSR projects. In this paper we use some simplifying assumptions with the aim of obtaining a benchmark: the minimum level of demand from which a positive social net present value could be expected when new capacity does not provide additional benefits beyond time savings from diverted and generated demand.

Suggested Citation

  • de Rus, Gines & Nash, C.A., 2007. "In what circumstances is investment in HSR worthwhile?," MPRA Paper 8044, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8044

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    References listed on IDEAS

    1. Bent Flyvbjerg & Mette K. Skamris Holm & Søren L. Buhl, 2003. "What Causes Cost Overrun in Transport Infrastructure Projects?," Transport Reviews, Taylor & Francis Journals, vol. 24(1), pages 3-18, January.
    2. Andrew W. Evans, 2003. "Accidental fatalities in transport," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 166(2), pages 253-260.
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    Cited by:

    1. Nicole Adler & Chris Nash & Eric Pels, 2008. "High-Speed Rail & Air Transport Competition," Tinbergen Institute Discussion Papers 08-103/3, Tinbergen Institute.
    2. Nash, Chris, 2010. "European rail reform and passenger services - the next steps," Research in Transportation Economics, Elsevier, vol. 29(1), pages 204-211.
    3. Dino Martellato, 2011. "TENT-T Priority Projects: Where do we Stand?," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 51-66.

    More about this item


    public investmest; infrastructure; cost-benefit analysis; transport; high speed rail;

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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