Handbook on Transport and Development
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Handbook on Transport and Development

Edited by Robin Hickman, Moshe Givoni, David Bonilla and David Banister

This Handbook provides an extensive overview of the relationships between transport and development. With 45 chapters from leading international authors, the book is organised in three main parts: urban structure and travel; transport and spatial impacts; and wider dimensions in transport and development. The chapters each present commentary on key issues within these themes, presenting the debate on the impacts of urban structure on travel, the impacts of transport investment on development, and social and cultural change on travel. A multitude of angles are considered – leaving the reader with a comprehensive and critical understanding of the field.
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Chapter 17: Transport projects and wider economic impacts

Torben Holvad and Steen Leleur


A major weakness of much of current appraisal practice of transport infrastructure projects is its basis on partial equilibrium analysis. The partial equilibrium approach implies that only the changes within the transport market are taken into account in the assessment of a given infrastructure project (e.g., time savings for transport users, reduced operating costs for transport producers and infrastructure construction costs), whereas linkages between the transport market and other markets (notably goods and labour markets) are to a large extent ignored. The importance of ignoring other markets in transport appraisal has been subject to much analysis in the available literature (see, e.g., SACTRA, 1999). A key research question is whether such wider economic impacts are additional to the time and cost savings generated from transport policy interventions. If such impacts are additional it could change the overall assessment of whether transport projects are worthwhile or not. Three principle issues are relevant (Goodwin and Persson, 2001): ● Traditional economic theory suggests that wider economic benefits are mostly not additional to the time and cost savings that generated them, but only a change in the form and incidence of these benefits. Inclusion of wider economic impacts in a cost benefit analysis (CBA) would therefore create double-counting. ● Newer economic theories dispute this, suggesting that there can be wider economic effects with additional value – but these can involve benefits or disbenefits.

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