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Managing the insolvable limitations of cost-benefit analysis: results of an interview based study

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  • Niek Mouter
  • Jan Annema
  • Bert Wee

Abstract

Cost-benefit analysis (CBA) has been an important tool for transport planners for several decades. Despite its popularity it has often been criticized for several reasons, amongst other things, because the tool has some insolvable limitations when it is applied in practice. In this paper we examine and scrutinize the perceptions of 86 key actors in the Dutch appraisal practice for spatial-infrastructure projects with regard to three insolvable CBA limitations: (1) CBA is always incomplete; (2) Effect estimations are always uncertain; (3) Effects that are difficult to estimate have a relatively weak position. We conclude that Dutch key actors were not only able to point out these three CBA limitations and the bad management of these limitations, but they were also able to propose several (pragmatic) solutions to improve the management of CBA limitations. This paper discusses how the proposed solutions relate to solutions addressed in the literature. Moreover, we provide recommendations for further research and discuss policy recommendations that transpired from the results. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Niek Mouter & Jan Annema & Bert Wee, 2015. "Managing the insolvable limitations of cost-benefit analysis: results of an interview based study," Transportation, Springer, vol. 42(2), pages 277-302, March.
    • Handle: RePEc:kap:transp:v:42:y:2015:i:2:p:277-302
    DOI: 10.1007/s11116-014-9539-0
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    References listed on IDEAS

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    Cited by:

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    2. Yunqiang Xue & Hongzhi Guan & Jonathan Corey & Bing Zhang & Hai Yan & Yan Han & Huanmei Qin, 2017. "Transport Emissions and Energy Consumption Impacts of Private Capital Investment in Public Transport," Sustainability, MDPI, vol. 9(10), pages 1-19, October.
    3. Becker, Nir & Kimhi, Ayal & Argaman, Eli, 2020. "Costs and benefits of waste soils removal," Land Use Policy, Elsevier, vol. 99(C).
    4. Mouter, Niek, 2017. "Dutch politicians’ attitudes towards Cost-Benefit Analysis," Transport Policy, Elsevier, vol. 54(C), pages 1-10.
    5. Mouter, Niek & Cabral, Manuel Ojeda & Dekker, Thijs & van Cranenburgh, Sander, 2019. "The value of travel time, noise pollution, recreation and biodiversity: A social choice valuation perspective," Research in Transportation Economics, Elsevier, vol. 76(C).
    6. Francis Marleau Donais & Irène Abi-Zeid & E. Owen D. Waygood & Roxane Lavoie, 2019. "A review of cost–benefit analysis and multicriteria decision analysis from the perspective of sustainable transport in project evaluation," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(3), pages 327-358, November.
    7. Yunqiang Xue & Hongzhi Guan & Jonathan Corey & Heng Wei & Hai Yan, 2017. "Quantifying a Financially Sustainable Strategy of Public Transport: Private Capital Investment Considering Passenger Value," Sustainability, MDPI, vol. 9(2), pages 1-20, February.

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