Abstract
An equilibrium model of a simplified transport system is used to explore the relationship between traffic forecasts and highway investment benefits under changes in exogenous variables (such as car ownership and economic activity) and travel costs. It is demonstrated that failure to incorporate the effects of cost changes may lead to substantial overestimation of both traffic volumes and measures of user benefits over the lifetime of a project. The implications for conventional methods of highway appraisal are considered in the light of these results. (Author/publisher).