An introduction to cost benefit analysis in transport is presented. Cost benefit analysis uses monetary values, where feasible and valid, weighted to allow for the various impacts relevant to a transport project decision. The analysis is conducted from an overall social viewpoint. Project appraisal is a necessary discipline because investment resources are limited and there are many potential opportunities for the use of the resources. Alternative scenarios are compared, involving taking a major decision or doing only the minimum necessary to maintain the status quo. Private sector organisations are likely to consider only commercial considerations whereas public sector organisations will also consider social impacts and require a cost benefit analysis. A flow diagram of cost benefit analysis is provided. User benefit is defined, and the effect of demand shifts between modes of transport considered. Revenues and costs, changes in taxation revenues, investment costs, the values of time and safety, environmental impacts, and wider economic impacts are considered. The pitfalls of cost benefit analyses performed with inadequate basic data are outlined.
Abstract