Scandinavian Working Papers in Economics

Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

No 2017:8: Public transport authorities’ use of cost-benefit analysis in practice

Andreas Vigren () and Anders Ljungberg ()
Additional contact information
Andreas Vigren: VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Anders Ljungberg: Transport Analysis, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

Abstract: Public transport services in Sweden are in 2016 worth over 40,000 million SEK annually, and the planning is carried out mostly by the Public Transport Authorities (PTA). Given the national goals for transport and infrastructure, economic efficiency is essential also in public transport operations. In 2003, Ljungberg (2007) sought to answer to which extent PTAs use Cost-Benefit Analyses (CBA), a methodology to assess economic efficiency, in their planning of operations and infrastructure. It was found that CBA is seldom used. This paper tries to answer the same question, but for the year 2016. The aim is, like Ljungberg (2007), to see to what extent PTAs are using CBA today, but also to investigate whether there have been any changes compared to the previous study.

A survey was sent to all Swedish PTAs with questions regarding current, previous, and projected future use of CBA. Questions about knowledge of reference materials and why the organization use (or do not use) CBA was asked. The main results are that most PTAs are not using CBA as decision support. For those who does, the method is used mostly for investments in payment systems and major line or traffic changes. When comparing the usage of CBA across different investment categories, the only statistically significant change from the 2003-study is an increased usage when changing fare structure. The PTAs seem not regard a lack of economic resources a reason for not using CBA. Rather, lack of knowledge and more reliance on other types of decision support are the reasons.

Keywords: Cost Benefit Analysis; Economic efficiency; Survey; CBA usage; Decision support

JEL-codes: C83; D61; L91; L98

26 pages, June 1, 2017

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