Methods for estimating the economic impact of transportation improvements: an interpretive review

This chapter reviews several methods of evaluating the economic impacts of transportation improvements. We begin with a discussion of basic project-based methods, such as benefitcost analysis, and discuss some issues which may complicate the accurate estimation of user benefits over the life of a project, especially the dynamic and recursive relationship between transportation networks and land development. We discuss the possible role of capitalized land value changes as an alternate source of estimated user benefits. We then move on to a discussion of regional economic analysis models as a tool for examining the effects of largescale projects or packages of transportation improvements. Their linkages with non-traditional sources of benefits, such as agglomeration effects, and also network effects is considered. Lastly, we consider aggregate analysis methods. These include production function analyses, cliometric studies, and other types of empirical investigations of the relationship between transportation and econometric growth at an aggregate scale. We close by commenting on the merits of each approach, and where and how they might usefully be applied. 2 1