October 29, 2009

Welfare analysis in transport networks

Should one calculate user benefits from changes in door-to-door journeys or from changes in the use of separate links of the network?

Quite often, the second approach is deemed wrong, as consumers are supposed to demand journeys, not parts of journeys. However, we show that for a quite general economic model and under fairly general assumptions regarding the network, both approaches are equivalent. The cost-benefit analysis practitioner can exploit this result. The links approach reveals on what part of the networks user benefits and/or losses are generated. This additional piece of information might help to optimize the project design.

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