Edited by Robin Hickman, Moshe Givoni, David Bonilla and David Banister
Chapter 16: Methods for estimating the economic impact of transportation improvements: an interpretive review
Transportation network improvements remain a politically popular means for the promotion of economic growth, even though in most developed countries the opportunities for projects that yield exceptionally large returns are becoming more and more scarce. There are other factors at play, including macroeconomic conditions, education and skills levels, which tend to be more important than transport investment. Hence, from the analyst’s perspective, estimating the economic impacts from transportation improvements can prove to be a fairly complicated matter, even for projects that are not very large in scope. This chapter reviews some of the more common methods that have been used by practitioners and researchers to analyze transportation improvements of varying scale. We move from basic project-based evaluation techniques like benefit-cost analysis to larger, regional-scale types of analysis that make use of regional economic models, and eventually to aggregate analysis techniques that shift focus from the effect of individual projects to the larger-scale and longer-term relationships between transportation infrastructure and economic growth. Our discussion of project-based evaluation methods is extended to focus on the unique difficulties of directly estimating the user benefits for a given project over its useful life. Apart from traditional sources of uncertainty encountered in forecasting the demand for a project, the effects of induced demand and the dynamic relationship between transportation network improvement, accessibility changes, and development patterns introduce additional sources of uncertainty that may affect estimates of user benefits.
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