INCORPORATING AGGLOMERATION ECONOMIES IN COST-BENEFIT ANALYSIS OF TRANSPORT PROJECTS

Dani Shefer () and Haim Aviram ()

ERSA conference papers from European Regional Science Association

Abstract: Economic evaluation of transport projects relies primarily on the impact of the project on road users. Economic benefits are calculated from the reduction in the aggregate value of time saved by the transport users as well as saving on vehicle operation costs. Most often the analysis assumes fix demand. Major mass transit, like the new Light Rail Transit (LRT), currently being proposed for the Tel-Aviv Metropolitan Area in Israel, is anticipated to generate substantial new traffic. This new traffic generation will most likely enhance the agglomeration forces at work in major urban concentration. Agglomeration economies could shift upward the production function of the metropolitan area, thus generating substantial additional benefits accrued to the transport project. In this paper we present the methodology used in the estimation of the benefits derived from agglomeration economies induced by the proposed new Light Rail Transit in the Tel-Aviv Metropolitan Area. We estimate the increase in the number of employees in the CBD due to the proposed LRT and their potential contribution to the total annual production of the CBD. Agglomeration economies could add a significant amount of additional benefit to the transport project. The extend of these benefits, in our case study, increased the benefit-cost ratio from 1.15 to 1.40.

Date: 2005-08
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www-sre.wu.ac.at/ersa/ersaconfs/ersa05/papers/133.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa05p133

Access Statistics for this paper

More papers in ERSA conference papers from European Regional Science Association Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by Gunther Maier ().