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Wider Economic Impacts in Transport Infrastructure Cost-Benefit Analysis - A Bridge Too Far?

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  • Leo Dobes
  • Joanne Leung

Abstract

Proponents of transport infrastructure have in recent decades sought to augment the estimated benefit of major projects beyond conventional cost-benefit analysis. Improved transport links are claimed to increase Marshallian external economies of scale; to reduce transport costs experienced by imperfectly competitive industries, and so induce them to increase their output; and to increase supply of labour, in response to lower transport costs, and thereby increase GDP and tax receipts. Estimates of the value of these three additional effects have resulted in multipliers and 'uprate factors' that appear to be applied by some government agencies to transport sector benefits calculated using conventional CBA. However, empirical estimates of these effects are likely to be exaggerated.

Suggested Citation

  • Leo Dobes & Joanne Leung, 2015. "Wider Economic Impacts in Transport Infrastructure Cost-Benefit Analysis - A Bridge Too Far?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 22(1), pages 75-98.
    • Handle: RePEc:acb:agenda:v:22:y:2015:i:1:p:75-98
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    File URL: http://press-files.anu.edu.au/downloads/press/p332753/pdf/argument02.pdf
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    2. Pogonyi, Csaba G. & Graham, Daniel J. & Carbo, Jose M., 2021. "Metros, agglomeration and displacement. Evidence from London," Regional Science and Urban Economics, Elsevier, vol. 90(C).

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