Measuring the benefits derived from a transportation investment

Sergio Jara-Diaz () and Terry L. Friesz

Transportation Research Part B: Methodological, 1982, vol. 16, issue 1, 57-77

Abstract: This paper reviews the problems associated with application of the concept of consumers' surplus to the measurement of benefits derived from a transportation investment. This review is warranted since such measurement is very complicated when alternative modes or different paths are available to the users and benefit measures have been proposed which, on the surface, appear not to agree. In particular, as Mohring (1976), Williams (1976) and Agnello (1977), among others, have discussed, demand curves for interdependent modes will shift in response to a modal specific improvement, i.e. a unimodal investment, thereby complicating the measurement of consumers' surplus. The perspective taken in this paper resolves seeming inconsistencies in the literature regarding the directions of demand shifts and the correct measure to be used in calculating changes in consumer's surplus following an investment. This is accomplished by introducing an aggregate, origin-destination demand curve which is independent of the alternative modes actually available and from which traditional modal demands can be derived. An approach for deriving the modal demands from the aggregate demand and the behavioral assumptions behind the aggregate supply is described; the aggregate demand is used to unequivocably determine the directions of shifts in the modal demand curves due to specific modal investments. The resulting consistency of modal and aggregate demand is shown to lead to an unambiguous measure of total consumers' surplus variation. Extensions to include producers' surplus are also given.

Date: 1982
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/0191-2615(82)90041-8
Full text for ScienceDirect subscribers only

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:eee:transb:v:16:y:1982:i:1:p:57-77

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

Access Statistics for this article

Transportation Research Part B: Methodological is currently edited by Fred Mannering

More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Catherine Liu ().