Scandinavian Working Papers in Economics

Working Papers,
Swedish National Road & Transport Research Institute (VTI)

No 2021:4: Finding transport projects with high value for money : what are the socio-geographic determinants?

Johanna Jussila Hammes (), Gro Holst Volden (), Morten Welde (), Maria Börjesson () and James Odeck ()
Additional contact information
Johanna Jussila Hammes: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
Gro Holst Volden: NTNU – Norwegian University of Science and Technology, 7491 Trondheim, Norway, Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
Morten Welde: NTNU – Norwegian University of Science and Technology, 7491 Trondheim, Norway, Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
Maria Börjesson: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
James Odeck: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden

Abstract: We use cost-benefit data from 1052 projects in Norway and Sweden to analyse ex ante factors that can explain which characteristics of transport infrastructure projects explain high value for money. The aim is to identify characteristics that can be used in assessments of projects before a cost-benefit analysis is feasible. We find that in Norway, road toll financing is a good indicator of high value projects, especially in the poorer municipalities. In Sweden, co-financing serves to raise investment volumes, but tends to lead to worse value for money. In Sweden, congestion seems to be the biggest problem in medium-income municipalities, while there are traffic safety benefits to be obtained in the rural areas. A higher initial capacity on a link raises both benefits and costs, and costs are higher in more densely populated areas in both countries. We find diminishing economies of scale in Norway and increasing economies of scale in Sweden.

Keywords: CBA; Transport infrastructure planning; Value for money

JEL-codes: R40; R42

37 pages, June 16, 2021

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