 Ranking transport projects by their socioeconomic value or financial internal rate of return?Alain Bonnafous () and Pablo Jensen Transport Policy, 2005, vol. 12, issue 2, 131-136 Abstract: This paper discusses the choice by the public authority of the most efficient programme of infrastructure investments. More specifically, it studies the optimal ranking of project implementation when these projects are partially self-financed by their own revenues such as tolled highways. In this case, the optimal investment programme must be defined under a constraint of annual subsidies. This paper demonstrates that the optimal ranking is not necessarily the ranking of decreasing socioeconomic IRR. This counter-intuitive result can be demonstrated by a general approach. Analytical calculations are not useful in this discrete problem because each programme is an ordered subset of projects. Therefore, there is no continuous variation linking the various programmes and the usual tools of optimization, such as differential calculus, are useless. Thus, we adopt here a discrete optimization analysis based on standard techniques in the physics area, such as Monte Carlo sampling. Date: 2005 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:12:y:2005:i:2:p:131-136 Ordering information: This journal article can be ordered from Access Statistics for this article Transport Policy is currently edited by Y. Hayashi More articles in Transport Policy from Elsevier |
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