Wider Economic Benefits in Transport Appraisal, a SCGE-model Approach with Application to a Proposed Norwegian Road Infrastructure Project

Plans for larger infrastructure investments always raise considerable public debate, both between professionals and less professional actors. There are almost always differences in opinion on the costs and benefits of the proposed project, where those in favor of the project judge the costs to be overestimated and the benefits underestimated, and the other way around for those opposing the project. In a series of papers Flyvbjerg, Holm et al. have focused on the inaccuracy in: cost estimations (Flyvbjerg, Holm et al. 2002; Flyvbjerg, Holm et al. 2003), cost related risks (Flyvbjerg, Holm et al. 2004) and demand forecasts (Flyvbjerg, Holm et al. 2005; Flyvbjerg, Holm et al. 2006). The model presented in this paper focuses on the gap between the professional and the popular project specific benefits. In the debate, and in the cases of a projects proposal being rejected, it is often argued that the traditional cost benefit analysis (CBA) does not fully capture the benefits of that particular project, and the existence of wider economic benefits is argued. The paper outlines the theoretical foundation behind cost-benefit analysis in transport appraisal and the presence of wider economic benefits in cases of imperfect secondary markets. A Spatial Computable General equilibrium (SCGE) model is developed on Norwegian data. The model will be applied to quantify wider economic benefits in a proposed Norwegian road infrastructure project. The Outline for the application of the model is presented in the further work section of the paper. The developed SCGE model is part of the RAEM family of SCGE models (Ivanova, Heyndrickx et al. 2007).

• Record URL:
  • https://aetransport.org/past-etc-papers/conference-papers-2012
• Supplemental Notes:
  • Abstract used by permission of Association for European Transport.
• Corporate Authors:

  Association for European Transport (AET)

  1 Vernon Mews, Vernon Street, West Kensington
  London W14 0RL,    
• Authors:
  • Hansen, Wiljar
  • Ivanova, Olga
• Conference:
  • European Transport Conference 2012
  • Location: Glasgow , Scotland
  • Date: 2012-10-8 to 2012-10-10
• Publication Date: 2012

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; Maps; References;
• Pagination: 13p
• Monograph Title: European Transport Conference 2012

Subject/Index Terms

• TRT Terms: Appraisals; Benefit cost analysis; Capital investments; Cost estimating; Economic benefits; Infrastructure
• Uncontrolled Terms: Spatial computable general equilibrium models
• Geographic Terms: Norway
• Subject Areas: Economics; Transportation (General); I10: Economics and Administration;

Filing Info

• Accession Number: 01542602
• Record Type: Publication
• Files: TRIS
• Created Date: Oct 29 2014 11:27AM