Benefit-cost analysis (BCA) is a valuable and widely used tool. To reduce the odds of misuse, this report probes some important methodological issues, especially as they relate to transport projects. The discussion is relatively non-technical and draws on case studies.
The issues examined include claims that transport projects fail to m easu re c er tai n b en e f i t s : empl oym en t c reat ion , regi on al development, logistic adaptations and ‘positive externalities’. Also examined are the choice of discount rate, the treatment of taxes, the valuation of travel time, multi-criteria analysis as an alternative to BCA, and the role of national economic models.
Publication Date: 1999