GRIPS 政策研究センター Policy Research Center


Oct 9, 2013 Report No:13-20

Pitfalls in estimating “wider economic benefits” of transportation projects

Field Economics
Language English

The Department for Transport in the United Kingdom has been a pioneer in including indirect benefits in the cost–benefit analysis of a transport project.  They identify three types of wider impacts, i.e., (1) agglomeration, (2) increased or decreased output in imperfectly competitive markets, and (3) labor market impacts, and provide detailed guidelines on how to estimate them.  Extending a differentiated product model that provides the microfoundations of urban agglomeration economies to include all three types of the wider impacts, this paper examines whether the British methodology of estimating the wider benefits can be justified theoretically.

Keywords wider benefits; cost–benefit analysis; agglomeration economies; new economic geography; price markup
attachment 13-20.pdf