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A global efficiency indicator for an investments planning
[Un indicateur synthétique d'évaluation d'un programme d'investissements]

Author

Listed:
  • Alain Bonnafous

    (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

  • Julien Brunel

    (SNCF)

  • Grégoire Marlot

    (SNCF)

Abstract

For comparing investment programs subject to the same public financing constraint, we just need to know the required subsidy and expected socio-economic Net Present Value (NPV) for the proposed projects. We also know that the welfare gain of the program is optimal when the projects are carried out in decreasing order of NPV to public subsidy ratio. This optimal standard, obviously consistent with the value-for-money criterion, provides an optimal program. The value of the welfare gain of any actual program must naturally be compared to the value of the welfare gain generated by an optimal program. The optimal program is easy to establish if we postulate the implementation of projects in decreasing order of NPV to public subsidy ratio. A global investment efficiency indicator can therefore be defined. In order to explore this proposal in an empirical way, we use homogeneous data in the rail industry. In France, socio-economic and financial evaluation is mandatory. Thus, we can use the data of 39 regional projects dedicated to modernize the network. This statistical base will enable us to test the efficiency indicator proposed and present several concrete results.

Suggested Citation

  • Alain Bonnafous & Julien Brunel & Grégoire Marlot, 2017. "A global efficiency indicator for an investments planning [Un indicateur synthétique d'évaluation d'un programme d'investissements]," Post-Print halshs-01655823, HAL.
    • Handle: RePEc:hal:journl:halshs-01655823
    DOI: 10.46298/cst.12159
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01655823
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