Forecasting the demand for privatized transport - What economic regulators should know, and why

Lourdes Trujillo (), Emile Quinet and Antonio Estache

No 2446, Policy Research Working Paper Series from The World Bank

Abstract: Forecasting has long been a challenge, and will remain so for the foreseeable future. But the analytical instruments and data processing capabilities available through the latest technology, and software, should allow much better forecasting than transport ministries, or regulatory agencies typically observe. Privatization brings new needs for demand forecasting. More attention is paid to risk under privatization, than when investments are publicly financed. And regulators must be able to judge traffic studies done by operators, and to learn what strategic behavior influenced these studies. Many governments, and regulators avoid good demand, modeling out of lack of conviction that theory, and models can do better than the"old hands"of the sector. This is dangerous when privatization changes the nature of business. For projects amounting to investments of $ 100-200 million, a cost of $ 100,000-200,000 is not a reason to reject a reasonable modeling effort. And some private forecasting firms are willing to sell guarantees, or insurance with their forecasts, to cover significant gaps between forecasts, and reality.

Keywords: Markets and Market Access; Environmental Economics&Policies; Economic Theory&Research; Decentralization; Banks&Banking Reform; Markets and Market Access; Economic Theory&Research; Banks&Banking Reform; Access to Markets; Environmental Economics&Policies (search for similar items in EconPapers)
Date: 2000-09-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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