scholarly journals Integration between Transport Models and Cost-Benefit Analysis to Support Decision-Making Practices: Two Applications in Northern Italy

2018 ◽  
Vol 2018 ◽  
pp. 1-16 ◽  
Author(s):  
Paolo Beria ◽  
Alberto Bertolin ◽  
Raffaele Grimaldi
Keyword(s):  
Network Effects ◽  
Cost Benefit Analysis ◽  
Consumer Surplus ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Sustainable Mobility ◽  
Transport Models ◽  
Planning Stage ◽  
Public Investments ◽  
Operative Case

Decisions on transport plans and projects involve relevant public investments and may also determine radical changes in users’ costs. Unfortunately, it is not rare that—especially at the strategic planning stage—decisions on alternative projects or scenarios are made on a qualitative basis or, at best, by setting some indicators and verifying how much they reach the politically decided targets (e.g., “increasing the use of bicycles by 10%”). In order to reduce subjectivity, a more quantitative and comprehensive approach to the evaluation is needed. A Cost-Benefit Analysis is a tool commonly used to assess public expenditure, but its application to mobility plans introduces further practical and theoretical complexities. In this paper, we will thus try to contribute to the topic of the assessment of both sustainable mobility transport plans and infrastructure projects by presenting the operative application of a CBA methodology that is, at the same time, theoretically coherent and rich in outputs to support the decision-maker. Moreover, we will discuss the possible use of GIS software in order to provide to the decision-makers a clear and immediate “picture” of the effects on the network linked to different scenarios. The structure is as follows. Firstly, we discuss the complexities involved in the evaluation of plans with respect to a single infrastructure. Secondly, we introduce the available approaches for the assessment of consumer surplus, namely, the Rule of Half and the logsum function method, which allow the perfect integration between CBA and transport models. Thirdly, we present, through some operative case studies, the methodologies applied to the assessment and the network effects visualization of the urban mobility plan and new infrastructures. Finally, we underline how we can make the results more understandable to politicians, policy-makers, stakeholders, and citizens and in general improve the transparency and the awareness of the choices.

Improving Assessment of Transport Policies by Dynamic Cost-Benefit Analysis

2003 ◽  
Vol 1839 (1) ◽  
pp. 107-114 ◽  
Author(s):  
Wolfgang Schade ◽  
Werner Rothengatter
Keyword(s):  
Network Effects ◽  
Cost Benefit Analysis ◽  
Dynamic Assessment ◽  
Cost Benefit ◽  
Transport Infrastructure ◽  
Transport Sector ◽  
The European Union ◽  
Benefit Analysis ◽  
Dynamic Approach ◽  
Economic Sectors

In the history of cost-benefit analysis (CBA), macroeconomic and micro-economic foundations have been developed. The latter has dominated in transport CBA during the last decades. The most widely used CBA approach can be characterized as comparative static and based on separate partial modeling. However, when it comes to significant indirect effects in the economic, social, and environmental systems connected with the transport system, alternative approaches to the microeconomic approach become inevitable. A system dynamics platform was developed that allows for a dynamic CBA integrating the most important indirect effect of transport policies. The approach was tested with large infrastructure programs and transport policy packages. Results of the dynamic approach reveal that the choice of the most favorable policy can change over time and depend on the time horizon defined for the analysis. In particular the dynamic approach allows for a clear allocation of costs and benefits to periods of time, which might be valuable information for policy acceptance and implementation. This research is integrated within a stream of European Commission projects on integrated and dynamic assessment, starting with the Assessment of Transport Strategies project (ASTRA) and extended by the projects Transport Infrastructure and Policy: A Macroeconomic Analysis for the European Union (TIPMAC) and Integrated Appraisal of Spatial Economic and Network Effects of Transport Investments and Policies (IASON). IASON focuses on analysis of indirect, second-round, or induced benefits and costs that occur through feedback effects between the transport sector and other economic sectors.

Evaluating the Economic Viability of Public Investments in Tourism

2019 ◽  
Vol 11 (1) ◽  
pp. 101-130
Author(s):  
Onil Banerjee ◽  
Martin Cicowiez ◽  
Adela Moreda
Keyword(s):  
Computable General Equilibrium ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Analytical Techniques ◽  
Integrated Approach ◽  
Economic Viability ◽  
Benefit Analysis ◽  
Development Bank ◽  
Public Investments ◽  
Benefits And Costs

AbstractVarious methods have been applied to evaluating the economic viability of public investments in tourism. In this article, we capitalize on the strengths of computable general equilibrium and cost-benefit analytical techniques and develop an integrated approach to evaluating public investments in tourism. We apply the approach to the evaluation of a US$6.25 million investment in tourism in Uruguay from the perspective of a multilateral development bank and a beneficiary government. These perspectives differ in a cost-benefit analysis (CBA) due to the timing of the costs incurred. The integrated approach is powerful in that it captures first and subsequent rounds of investment impacts of benefits and costs; resource diversion and constraints are accounted for, and the estimation of benefits is consistent with the welfare economics underpinnings of CBA.

Cost — Benefit Analysis and Large-Scale Infrastructure Projects: State of the Art and Challenges

2007 ◽  
Vol 34 (4) ◽  
pp. 598-610 ◽  
Author(s):  
Roger Vickerman
Keyword(s):  
Computable General Equilibrium ◽  
Imperfect Competition ◽  
Large Scale ◽  
Best Practice ◽  
Network Effects ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Infrastructure Projects ◽  
Long Time

In this paper I review the problems surrounding the use of cost-benefit analysis (CBA) in the appraisal of large-scale infrastructure projects. I define the requirements of a best-practice transport CBA and show the difficulties in achieving these for large-scale projects. The main difficulties discussed are those of forecasting over long time periods, dealing with imperfect competition in transport-using sectors to obtain estimations of wider transport benefits, introducing private finance and appraising network effects. I conclude that CBA can remain a valuable tool as part of the appraisal process but that the inputs to a CBA have to be carefully assessed, and complementary approaches, such as computable general equilibrium modelling, have a useful role to play for very large or network projects.

scholarly journals The Cost-Benefit Fallacy: Why Cost-Benefit Analysis Is Broken and How to Fix It

2021 ◽  
pp. 1-25
Author(s):  
Bent Flyvbjerg ◽  
Dirk W. Bester
Keyword(s):  
Resource Allocation ◽  
Cost Benefit Analysis ◽  
Statistical Significance ◽  
Cost Benefit ◽  
Policy Implications ◽  
Benefit Analysis ◽  
Costs And Benefits ◽  
Cost Overruns ◽  
Public Investments ◽  
The Cost

Abstract Most cost-benefit analyses assume that the estimates of costs and benefits are more or less accurate and unbiased. But what if, in reality, estimates are highly inaccurate and biased? Then the assumption that cost-benefit analysis is a rational way to improve resource allocation would be a fallacy. Based on the largest dataset of its kind, we test the assumption that cost and benefit estimates of public investments are accurate and unbiased. We find this is not the case with overwhelming statistical significance. We document the extent of cost overruns, benefit shortfalls, and forecasting bias in public investments. We further assess whether such inaccuracies seriously distort effective resource allocation, which is found to be the case. We explain our findings in behavioral terms and explore their policy implications. Finally, we conclude that cost-benefit analysis of public investments stands in need of reform and we outline four steps to such reform.

Money Metric, Consumer Surplus and Welfare Measurement

2001 ◽  
Vol 2 (2) ◽  
pp. 177-193 ◽  
Author(s):  
Claude Hillinger
Keyword(s):  
Cost Benefit Analysis ◽  
Consumer Surplus ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Rigorous Derivation ◽  
Cost Of Living ◽  
Interior Region ◽  
Empirical Measures ◽  
Definition Of ◽  
The Cost

Abstract The paper provides a rigorous derivation of the `welfare triangle approximation' (WTA), which is at the centre of cost-benefit analysis. The result is generalized by showing that the WTA is one of two dual expressions, one of which approximates the change in real consumption, the other the change in the cost of living. The result is based on a correction of a proof attempted by Hicks. Many other derivations are also given, each based on a different definition of the theoretical functions to be approximated. The final result is the following: each of the empirical variations corresponds to a range of theoretical variations. The edges of the range are theoretical Laspeyres and Paasche variations which are approximated linearly; the interior region of the range is approximated quadratically; the centre of the range is replicated exactly by the empirical measures.

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