IDEAS home Printed from https://ideas.repec.org/a/bpj/jbcacn/v2y2011i1n2.html
   My bibliography  Save this article

The BCA of HSR: Should the Government Invest in High Speed Rail Infrastructure?

Author

Listed:
  • De Rus Ginés

    (University of Las Palmas de G.C., Spain, and University Carlos III de Madrid, Spain)

Abstract

This paper deals with public investment in High-Speed Rail (HSR) infrastructure and tries to understand the economic rationale for allocating public money to the construction of new HSR lines. The examination of data on costs and demand shows that the case for investing in HSR requires several conditions to be met: an ex ante high volume of traffic in the corridor where the new lines are built, significant time savings, high average willingness of potential users to pay, the release of capacity in the conventional rail network and airports. On the contrary, net environmental benefits seem to be insignificant in influencing the social desirability of HSR investment. This paper discusses, within a cost-benefit analysis framework, under which conditions the expected benefits could justify the investment in HSR projects.

Suggested Citation

  • De Rus Ginés, 2011. "The BCA of HSR: Should the Government Invest in High Speed Rail Infrastructure?," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-28, January.
    • Handle: RePEc:bpj:jbcacn:v:2:y:2011:i:1:n:2
    DOI: 10.2202/2152-2812.1058
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/2152-2812.1058
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/2152-2812.1058?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fernand Martin, 1997. "Justifying a high-speed rail project: social value vs. regional growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(2), pages 155-174.
    2. Vicente Inglada & GinÊs de Rus, 1997. "Cost-benefit analysis of the high-speed train in Spain," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(2), pages 175-188.
    3. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    4. Roger Vickerman, 1997. "High-speed rail in Europe: experience and issues for future development," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 21-38.
    5. Kingsley E. Haynes, 1997. "Labor markets and regional transportation improvements: the case of high-speed trains An introduction and review," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 57-76.
    6. Per Kageson, 2009. "Environmental Aspects of Inter-City Passenger Transport," OECD/ITF Joint Transport Research Centre Discussion Papers 2009/28, OECD Publishing.
    7. Ginés Rus & M. Socorro, 2010. "Infrastructure Investment and Incentives with Supranational Funding," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(3), pages 551-567, September.
    8. C.A. Nash, 1991. "The case for high speed rail," Investigaciones Economicas, Fundación SEPI, vol. 15(2), pages 337-354, May.
    9. Daniel J. Graham, 2007. "Agglomeration, Productivity and Transport Investment," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 317-343, September.
    10. Rothengatter, Werner, 2003. "How good is first best? Marginal cost and other pricing principles for user charging in transport," Transport Policy, Elsevier, vol. 10(2), pages 121-130, April.
    11. Diego Puga, 2002. "European regional policies in light of recent location theories," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 373-406, October.
    12. José A. Gómez-Ibáñez & Ginés de Rus (ed.), 2006. "Competition in the Railway Industry," Books, Edward Elgar Publishing, number 4213.
    13. Robinson, James A. & Torvik, Ragnar, 2005. "White elephants," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 197-210, February.
    14. Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, University of Bath, vol. 41(2), pages 173-188, May.
    15. Givoni, Moshe & Banister, David, 2006. "Airline and railway integration," Transport Policy, Elsevier, vol. 13(5), pages 386-397, September.
    16. Chris Nash & Tom Sansom, 2001. "Pricing European Transport Systems: Recent Developments and Evidence from Case Studies," Journal of Transport Economics and Policy, University of Bath, vol. 35(3), pages 363-380, September.
    17. Natalia Zinovyeva & Manuel F. Bagues, 2010. "Does gender matter for academic promotion? Evidence from a randomized natural experiment," Working Papers 2010-15, FEDEA.
    18. David Gillen & David Levinson & Jean Michel Mathieu & Adib Kanafani, 1997. "The full cost of high-speed rail: an engineering approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(2), pages 189-215.
    19. Vickerman, R W, 1995. "The Regional Impacts of Trans-European Networks," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 237-254, May.
    20. Campos, Javier & de Rus, Gines & Barron, Ignacio, 2007. "A review of HSR experiences around the world," MPRA Paper 12397, University Library of Munich, Germany.
    21. Ginés de Rus & Gustavo Nombela, 2007. "Is Investment in High Speed Rail Socially Profitable?," Journal of Transport Economics and Policy, University of Bath, vol. 41(1), pages 3-23, January.
    22. K. E. Haynes & C. Karlsson & U. Blum, 1997. "Introduction to the special issue The regional and urban effects of high-speed trains," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 1-20.
    23. Campos, Javier & de Rus, Ginés, 2009. "Some stylized facts about high-speed rail: A review of HSR experiences around the world," Transport Policy, Elsevier, vol. 16(1), pages 19-28, January.
    24. Nash, Chris, 2003. "Marginal cost and other pricing principles for user charging in transport: a comment," Transport Policy, Elsevier, vol. 10(4), pages 345-348, October.
    25. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. High-speed rail: when should governments invest?
      by Dave Simpson in hand picked... and carefully sorted on 2012-01-10 15:30:32

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Markus Brückner & Antonio Ciccone & Andrea Tesei, 2012. "Oil Price Shocks, Income, and Democracy," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 389-399, May.
    2. Salvador Bertomeu & Antonio Estache, 2016. "Unbundling Political and Economic Rationality: a Non-Parametric Approach Tested on Spain," Working Papers ECARES ECARES 2016-17, ULB -- Universite Libre de Bruxelles.
    3. Jiang, Changmin & Zhang, Anming, 2014. "Effects of high-speed rail and airline cooperation under hub airport capacity constraint," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 33-49.
    4. Borsati, Mattia & Albalate, Daniel, 2020. "On the modal shift from motorway to high-speed rail: evidence from Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 137(C), pages 145-164.
    5. Li, Xiaolong & Wu, Zongfa & Zhao, Xingchen, 2020. "Economic effect and its disparity of high speed rail in China: A study of mechanism based on synthesis control method," Transport Policy, Elsevier, vol. 99(C), pages 262-274.
    6. Ofelia Betancor & Gerard Llobet, 2015. "Contabilidad Financiera y Social de la Alta Velocidad en Espana," Studies on the Spanish Economy eee2015-08, FEDEA.
    7. Chen, Fanglin & Chen, Zhongfei, 2023. "High-speed rail and happiness," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).
    8. de Rus, Ginés & Socorro, M. Pilar, 2014. "Access pricing, infrastructure investment and intermodal competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 374-387.
    9. Martín, Belén & Ortega, Emilio & de Isidro, Ágata & Iglesias-Merchan, Carlos, 2021. "Improvements in high-speed rail network environmental evaluation and planning: An assessment of accessibility gains and landscape connectivity costs in Spain," Land Use Policy, Elsevier, vol. 103(C).
    10. World Bank, 2014. "Regional Economic Impact Analysis of High Speed Rail in China : Main Report," World Bank Publications - Reports 19996, The World Bank Group.
    11. Ginés de Rus & Javier Campos & Daniel Graham & M. Pilar Socorro & Jorge Valido, 2020. "Evaluación Económica de Proyectos y Políticas de Transporte: Metodología y Aplicaciones. Parte 1: Metodología para el análisis coste-beneficio de proyectos y políticas de transporte," Working Papers 2020-11, FEDEA.
    12. Huang, Ying & Xu, Wangtu (Ato), 2021. "Spatial and temporal heterogeneity of the impact of high-speed railway on urban economy: Empirical study of Chinese cities," Journal of Transport Geography, Elsevier, vol. 91(C).
    13. Cascetta, Ennio & Cartenì, Armando & Henke, Ilaria & Pagliara, Francesca, 2020. "Economic growth, transport accessibility and regional equity impacts of high-speed railways in Italy: ten years ex post evaluation and future perspectives," Transportation Research Part A: Policy and Practice, Elsevier, vol. 139(C), pages 412-428.
    14. Bertoméu-Sánchez, Salvador & Estache, Antonio, 2017. "Unbundling political and economic rationality: A non-parametric approach tested on transport infrastructure in Spain," Transport Policy, Elsevier, vol. 59(C), pages 181-195.
    15. Li, Zekun & Chen, Zhenhua, 2023. "Predicting the future development scale of high-speed rail through the urban scaling law," Transportation Research Part A: Policy and Practice, Elsevier, vol. 174(C).
    16. de Rus, Ginés & Socorro, M. Pilar, 2019. "Pricing and investment in alternative transport infrastructures," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 96-107.
    17. Hultkrantz, Lars & A. Krüger, Niclas & Mantalos, Panagiotis, 2014. "Risk-adjusted long-term social rates of discount for transportation infrastructure investment," Research in Transportation Economics, Elsevier, vol. 47(C), pages 70-81.
    18. Kortazar, Andoni & Bueno, Gorka & Hoyos, David, 2021. "Environmental balance of the high speed rail network in Spain: A Life Cycle Assessment approach," Research in Transportation Economics, Elsevier, vol. 90(C).
    19. Daniel Albalate & Javier Campos & Juan Luis Jiménez, 2015. "“Tourism and high speed rail in Spain: Does the AVE increase local visitors?”," IREA Working Papers 201527, University of Barcelona, Research Institute of Applied Economics, revised Dec 2015.
    20. Ginés de Rus, 2014. "The economic evaluation of infrastructure investment. Some inescapable tradeoffs," Working Papers 2014-16, FEDEA.
    21. Socorro, M. Pilar & Viecens, M. Fernanda, 2013. "The effects of airline and high speed train integration," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 160-177.
    22. Francesco De Fabiis & Alessandro Carmelo Mancuso & Fulvio Silvestri & Pierluigi Coppola, 2023. "Spatial Economic Impacts of the TEN-T Network Extension in the Adriatic and Ionian Region," Sustainability, MDPI, vol. 15(6), pages 1-15, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Campos, Javier & de Rus, Ginés, 2009. "Some stylized facts about high-speed rail: A review of HSR experiences around the world," Transport Policy, Elsevier, vol. 16(1), pages 19-28, January.
    2. de Rus Ginés & Socorro M. Pilar, 2017. "Planning, Evaluation and Financing of Transport Infrastructures: Rethinking the Basics," Review of Network Economics, De Gruyter, vol. 16(2), pages 143-160, June.
    3. Campos, Javier & de Rus, Gines & Barron, Ignacio, 2007. "A review of HSR experiences around the world," MPRA Paper 12397, University Library of Munich, Germany.
    4. Campos, Javier & de Rus, Gines & Barron, Iñaki, 2007. "The cost of building and operating a new high speed rail line," MPRA Paper 12396, University Library of Munich, Germany.
    5. Marie Delaplace & Sylvie Bazin & christophe Beckerich & Corinne Blanquart, 2011. "High speed Rail service and local economic development, a review," ERSA conference papers ersa10p167, European Regional Science Association.
    6. Borsati, Mattia & Albalate, Daniel, 2020. "On the modal shift from motorway to high-speed rail: evidence from Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 137(C), pages 145-164.
    7. Daniel Albalate & Javier Campos & Juan Luis Jiménez, 2015. "“Tourism and high speed rail in Spain: Does the AVE increase local visitors?”," IREA Working Papers 201527, University of Barcelona, Research Institute of Applied Economics, revised Dec 2015.
    8. Castillo-Manzano, José I. & Pozo-Barajas, Rafael & Trapero, Juan R., 2015. "Measuring the substitution effects between High Speed Rail and air transport in Spain," Journal of Transport Geography, Elsevier, vol. 43(C), pages 59-65.
    9. Adler, Nicole & Pels, Eric & Nash, Chris, 2010. "High-speed rail and air transport competition: Game engineering as tool for cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 812-833, August.
    10. de Rus, Ginés & Socorro, M. Pilar, 2014. "Access pricing, infrastructure investment and intermodal competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 374-387.
    11. Daniel Albalate & Germá Bel, 2015. "La experiencia internacional en alta velocidad ferroviaria," Working Papers 2015-02, FEDEA.
    12. Jiang, Changmin & Zhang, Anming, 2014. "Effects of high-speed rail and airline cooperation under hub airport capacity constraint," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 33-49.
    13. Ginés Rus & M. Socorro, 2010. "Infrastructure Investment and Incentives with Supranational Funding," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(3), pages 551-567, September.
    14. Kim, Hyojin & Sultana, Selima & Weber, Joe, 2018. "A geographic assessment of the economic development impact of Korean high-speed rail stations," Transport Policy, Elsevier, vol. 66(C), pages 127-137.
    15. Chen, Zhenhua, 2023. "Socioeconomic Impacts of high-speed rail: A bibliometric analysis," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    16. Chen, Zhenhua & Xue, Junbo & Rose, Adam Z. & Haynes, Kingsley E., 2016. "The impact of high-speed rail investment on economic and environmental change in China: A dynamic CGE analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 232-245.
    17. Dobruszkes, Frédéric & Dehon, Catherine & Givoni, Moshe, 2014. "Does European high-speed rail affect the current level of air services? An EU-wide analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 461-475.
    18. Cheng, Yung-Hsiang, 2010. "High-speed rail in Taiwan: New experience and issues for future development," Transport Policy, Elsevier, vol. 17(2), pages 51-63, March.
    19. Michael B. Charles & Neal Ryan & Robbert A. Kivits, 2012. "Moving towards sustainable intercity transport: a case study of high-speed rail in Australia," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 15(1/2), pages 125-147.
    20. Enshou Zhang & Lei Chen & Pei Kuang & David G. Dickinson, 2023. "An Accessibility Measurement Based on Commuter Behaviour and Living Conditions: An Empirical Analysis of the High-Speed Railway Network in the East of China," Sustainability, MDPI, vol. 15(5), pages 1-29, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:jbcacn:v:2:y:2011:i:1:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.