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Cost — Benefit Analysis and Large-Scale Infrastructure Projects: State of the Art and Challenges

Roger Vickerman ()

Environment and Planning B, 2007, vol. 34, issue 4, 598-610

Abstract: In this paper I review the problems surrounding the use of cost-benefit analysis (CBA) in the appraisal of large-scale infrastructure projects. I define the requirements of a best-practice transport CBA and show the difficulties in achieving these for large-scale projects. The main difficulties discussed are those of forecasting over long time periods, dealing with imperfect competition in transport-using sectors to obtain estimations of wider transport benefits, introducing private finance and appraising network effects. I conclude that CBA can remain a valuable tool as part of the appraisal process but that the inputs to a CBA have to be carefully assessed, and complementary approaches, such as computable general equilibrium modelling, have a useful role to play for very large or network projects.

Date: 2007
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