Economic Benefit Cost Analysis, Social Benefit Cost Analysis and of the Emotional Appeal of Railway Projects in Planning (2018)

©Antti Talvitie, 2018

Jules Dupuit / Paris street: Wikimedia Commons / Public domain

Economic Benefit Cost Analysis, Social Benefit Cost Analysis and of the Emotional Appeal of Railway Projects in Planning

Presentation in AALTO University’s Summer School on Transportation (2021)

Antti Talvitie (aptalvitie(at)gmail.com)

ABSTRACT

This presentation has three perspectives anchored on the author’s professions.  The first perspective is engineering-economic and discusses Economic Benefit Cost Analysis (EBCA) developed by Jules Dupuit in the mid-1800s, which informs on the economic value and outcome of a transport project. The second perspective social-economic, Social Benefit Cost Analysis (SBCA), which informs on socioeconomic value and outcomes of transport projects. The third perspective is psychoanalytic, which informs of the motivations of travel behavior and project decisions.  All are implanted in the author’s professional education, training, and experience as a civil engineer and as a psychoanalyst.

The paper uses three references as the inspirational basis of the paper.  The first two are based on revealed preferences: the author’s retrospective paper on Jules Dupuit’s invention of the (economic) benefit cost analysis (EBCA), and Reginald Arkell’s paper on the social benefits and social costs (SBCA) of the Chicago expressway system. The emotional appeal of the rail mode choice and project decisions is based on stated preferences. The key reference is the author’s “Rail Factor and Realism of the Unconscious”. Supporting references are also cited, some included in the references of the above papers without explicit citation.

In the paper Jules Dupuit’s dictum: “The only utility is that which people are willing to pay for” is discussed and elaborated.  It is concluded that the user prices of transport services are a very important gauge of benefits. Both EBCA and SBCA are necessary and indicate the inform of the economic and social values of transport projects. Other important findings are:

• Higher user prices for transport would make cities more compact and population density greater.
  
  
• Value of travel time and land use cannot be counted as net benefits without considering non-users’ reduction in consumer surplus.
  
  
• For summary statistics Net Present Value (NPV) is more informative and should be used and not (only) Benefit/Cost ratio (BCR). 
  
  
• No revealed preference for a rail factor was found in mode choice models.
  
  
• Rail mode has an emotionally stated preference in planning and use, which vanishes if passengers must pay for its costs.

FULL PAPER, Pdf, 407 KB, 18 pages.