Publications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Does uncertainty make cost-benefit analyses pointless?
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics. Örebro Universitet.ORCID iD: 0000-0002-4209-1997
Kungliga Tekniska Högskolan.
2016 (English)In: Transportation Research Part A: Policy and Practice, ISSN 0965-8564, E-ISSN 1879-2375, Vol. 92, p. 195-205Article in journal (Refereed) Published
Abstract [en]

Cost-benefit analysis (CBA) is widely used in public decision making on infrastructure investments. However, the demand forecasts, cost estimates, benefit valuations and effect assessments that are conducted as part of CBAs are all subject to various degrees of uncertainty. The question is to what extent CBAs, given such uncertainties, are still useful as a way to prioritize between infrastructure investments, or put differently, how robust the policy conclusions of CBA are with respect to uncertainties. Using simulations based on real data on national infrastructure plans in Sweden and Norway, we study how investment selection and total realized benefits change when decisions are based on CBA assessments subject to several different types of uncertainty.

Our results indicate that realized benefits and investment selection are surprisingly insensitive to all studied types of uncertainty, even for high levels of uncertainty. The two types of uncertainty that affect results the most are uncertainties about investment cost and transport demand. Provided that decisions are based on CBA outcomes, reducing uncertainty is still worthwhile, however, because of the huge sums at stake. Even moderate reductions of uncertainties about unit values, investment costs, future demand and project effects may increase the realized benefits infrastructure investment plans by tens or hundreds of million euros. We conclude that, despite the many types of uncertainties, CBA is able to fairly consistently separate the wheat from the chaff and hence contribute to substantially improved infrastructure decisions.

Place, publisher, year, edition, pages
2016. Vol. 92, p. 195-205
Keyword [en]
Cost benefit analysis, Priority (gen), Investment, Transport infrastructure, Simulation, Sensitivity, Calculation
National Category
Economics Transport Systems and Logistics
Research subject
00 Road: General works, surveys, comprehensive works, 02 Road: Economics
Identifiers
URN: urn:nbn:se:vti:diva-10995DOI: 10.1016/j.tra.2016.08.002Scopus ID: 2-s2.0-84989866931OAI: oai:DiVA.org:vti-10995DiVA, id: diva2:1047207
Available from: 2016-11-17 Created: 2016-11-03 Last updated: 2017-11-06Bibliographically approved

Open Access in DiVA

No full text in DiVA

Other links

Publisher's full textScopus

Authority records BETA

Asplund, Disa

Search in DiVA

By author/editor
Asplund, Disa
By organisation
Transport economics
In the same journal
Transportation Research Part A: Policy and Practice
EconomicsTransport Systems and Logistics

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 36 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf