Strait crossings and economic development: Developing economic impact assessment by means of ex post analyses

Svein Bråthen and Arild Hervik

Transport Policy, 1997, vol. 4, issue 4, 193-200

Abstract: There is widespread scepticism among politicians and authorities concerning CBA as a main instrument for decision-making. This may cause possible bias towards non-quantitative factors as decisive. The challenge is to improve the methological approach, carefully examining the real benefits for road users. One way of doing this is to develop ex post CBA to test how critical assumptions fit to reality. The focus of this paper is on ex post analyses carried out with five case studies in larger infrastructure projects to assess the economic profitability actually occurring from new infrastructure. There are substantial differences in benefits ex post compared with the ex ante analyses, mainly explained by a shift parameter in willingness to pay (WTP) for the improvements. These 'inconvenience costs' saved by the road users add to the traditional value-of-time benefits. The paper also examines the profitability of private versus public funding and ends up with some considerations on regional impacts of transport infrastructure. A short presentation of a pilot study from two of the fixed links to elicit the influence on local industry is given. Some informal results support the theory of forward and backward linkages from new economic geography.

Date: 1997
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