In what circumstances is investment in HSR worthwhile?
Ginés de Rus () and
MPRA Paper from University Library of Munich, Germany
The case for building new High Speed Rail (HSR) infrastructure depends its the capacity to generate social benefits which compensate for the construction, maintenance and operation costs. Decisions to invest in this technology have not always been based on sound economic analysis. A mix of arguments, besides time savings –strategic considerations, environmental effects, regional development and so forth– have often been used with inadequate evidence to support them. We have explored under what conditions net welfare gains can be expected from new HSR projects. In this paper we use some simplifying assumptions with the aim of obtaining a benchmark: the minimum level of demand from which a positive social net present value could be expected when new capacity does not provide additional benefits beyond time savings from diverted and generated demand.
Keywords: public investmest; infrastructure; cost-benefit analysis; transport; high speed rail (search for similar items in EconPapers)
JEL-codes: R40 D61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-ppm and nep-ure
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