Quantifying the Socio-economic Benefits of Transport Roundtable
Summary and Conclusions
This report sets out several of the recent advances to the quantification and valuation of economic benefits of transport and points to the most promising approaches. The sophistication of modern supply chains and the growing prominence of the services sector have increased the interest of decision-makers in economic benefits beyond those traditionally captured in transport appraisal. Recent advances in assessment methodologies, and their application in decision-making procedures, make it useful to review the state of the art in two areas in particular: reliability benefits and wider economic benefits that flow from transport-related development.
A commonly used quantitative measure of the extent to which a project, over its lifetime, will bring benefits that exceed its costs is cost-benefit analysis (CBA). However, CBA faces major challenges:
- There can be a mismatch between what a CBA delivers and the information most sought by decision makers (such as impacts on jobs and regional growth).
- The scope of benefits captured in a CBA is generally constrained by practical limitations of forecasting and valuation.
- Fundamental changes to the quantity or locations of businesses, investments, households and employment anticipated from transport investments are not captured within standard CBA.
To explore these issues, the ITF convened a Roundtable meeting of 30 experts from around the world to present and discuss the state of knowledge. The Roundtable report brings together the input papers and discussions. The report describes efforts to improve decision making through improving the quality of transport CBA. Three areas are addressed in detail: strategies for making the most of CBA, valuing and forecasting reliability benefits, and capturing wider economic impacts of transport investments.