IDEAS home Printed from
   My bibliography  Save this paper

Cost-Benefit Analysis for Investment Decisions: Chapter 16 (Cost-Benefit Analysis of Transportation Projects)


  • Glenn Jenkins

    (Queen's University, Canada and Eastern Mediterranean University, Cyprus)

  • Chun-Yan Kuo

    (Queen's University, Canada)

  • Arnold C. Harberger

    (University of California, Los Angeles, USA)


This chapter will focus on the problems of evaluating transportation projects in the context of the less-developed countries. Emphasis will be placed on highway projects, because these account for the bulk of transport investments in the developing parts of the world. If a project passes a straight financial test, based on the present value of its cash inflows and outflows, projects would only come if this financial NPV were outweighed by the present value of the project’s various externalities. Road projects, however, carry a special interest as compared to other types of transport investments, because of the fact that they only rarely can be justified on strictly commercial considerations. Rail and air fares and port and landing charges constitute direct devices, by which the costs of the relevant facilities can, over time, are recouped from the beneficiaries. To a first approximation, therefore, the worthwhileness of such projects can be judged by the strictly commercial criterion of prospective profitability. Except for toll roads, road investments never present the luxury of such a positive financial NPV. This chapter presents a framework for the appraisal of both road improvements as well as the evaluation of new roads and new modes of travel.

Suggested Citation

  • Glenn Jenkins & Chun-Yan Kuo & Arnold C. Harberger, 2011. "Cost-Benefit Analysis for Investment Decisions: Chapter 16 (Cost-Benefit Analysis of Transportation Projects)," Development Discussion Papers 2011-16, JDI Executive Programs.
  • Handle: RePEc:qed:dpaper:209

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Road improvements; vehicle operating costs; value of time; time savings; congestion externalities; complementary and substitute roads.;

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate


    Access and download statistics


    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:qed:dpaper:209. 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: (Bahman Kashi). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.