Comparing Investments in New Transport Infrastructure: Roads versus Railways?

Abstract This paper contributes to the debate on investment in transport infrastructure and the allocation of public funds between road and railway projects. We model the two options and provide a consistent framework to appraise investment in typical new inter–urban road and rail projects. Our results suggest that road improvements have substantially higher returns than railway schemes. These findings cast doubt on the rationale of the new transport policy for the UK, which proposes to allocate more public funds to the (private) railways than total new investment in strategic roads.