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

Abstract: Cost-Benefit analysis (CBA) is sometimes criticized for not taking account of induced demand due to planning policy or relocalization triggered by large infrastructure investments. There is also a notion among planers and decision makers that accounting for these effects can underestimate the relative merits of rail investments. In this paper we explore if induced demand from relocalization triggered by an infrastructure investment have any significant impact on the CBA outcome. A second aim is to investigate the robustness of the relative CBA ranking of rail and road investments with respect to the general planning policy in the region 25 years ahead. We use a large-scale integrated land-use and traffic model calibrated for the Stockholm region. We find that the induced demand from relocalization triggered by infrastructure investments has a very limited impact on the CBA outcome. This result is largely due to the fact that the population that relocates over 20-30 years is limited in comparison to the total population. Moreover, the uncertainty in the CBA outcome, and in particular the relative ranking of rail and road investments, caused by uncertainties in future land-use policies is limited. As expected, however, the CBA outcome of rail investments is to a larger extent dependent on stronger planning policy than road investments. The results underscores that the planning policy in the region have a considerably stronger impact on accessibility and total car use than individual road or rail investments. Only the largest road investment, a second bypass in the region, induces car use of the same magnitude as the impact of the planning policy in the region.

Keywords: Cost-Benefit Analysis; Transport planning; Land-use planning

JEL-codes: C25; D61; J22; R41; R42

24 pages, October 28, 2013

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CTS2013-32.pdf  

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