Evaluation of Rail Infrastructure Investments Related to the New Rail Regulatory Environment in Some Countries
As for any transportation infrastructure project, rail investment projects are subject to appraisals, which traditionally include an economic evaluation to determine public benefits and a financial analysis to determine the purely financial returns. When the company that owns and manages the rail infrastructure, termed the “infrastructure manager,” is legally different from the company that provides the rail service, appraisals are typically carried out separately for the infrastructure manager and the train operator. The appraisal process is different from the process when the same legal entity owns and manages both infrastructure and train operations. The distinction is especially pertinent for European Union member states. This study proposed a comprehensive methodology for rail investment project appraisal for the case of rail infrastructure and train operations that were owned and managed by separate legal entities. The study defined the socioeconomic viability of a project from the infrastructure manager's perspective, which reflected social welfare, as well as the financial viability of the project from the perspectives of the infrastructure manager and the operator. It was recognized that a project would proceed only if the socioeconomic evaluation were positive. In the case of a negative financial appraisal, which was often the case for low-volume rail links, the study demonstrated how the use of subsidies could render the rail investment financially viable. The methodology was applied for a proposed investment in the western extensions of the railway network of Greece project.
International Variation in Cost–Benefit Analysis of Urban Rail Projects
This paper compares urban rail cost–benefit analysis (CBA) in 11 countries and the region of Hong Kong, China, to understand differences and implications for evaluation outcomes and to highlight possible CBA improvements. All countries studied used multicriteria analysis and examined capital, operating, and maintenance costs, and some included asset residual value. Monetized benefits varied, although travel time savings (TTS) were common primary benefits. Several countries also captured TTS for trucks, pedestrians, and cyclists. Accident cost savings (ACC) were common, although unit accident costs varied. For secondary benefits, all countries and regions except Hong Kong and Singapore included environmental externalities. Air pollution and noise impact were common. The United States was unique in including option value, and Germany and the Netherlands were unique in adopting agglomeration benefits. The social discount rate (SDR), assessment period, and decision criteria varied. Most SDRs used the marginal rate of return on private-sector investment (yielding an SDR of 6% to 10%). Net present value was the common decision criterion, and 20 to 30 years was a common evaluation period. Standardized parameter valuations suggested commuting value of time as $5 in Australian dollars per hour (A$5/h) to A$15/h, with an average of A$10/h for public transport users and A$10.50/h for car users. Accident cost varied; fatal accidents cost A$0.1 to A$4.25 million and serious accidents A$60,000 to A$490,000. A case study illustrates implications of adopting approaches with varied outcomes. Only Australia, the United States, the United Kingdom, and the Netherlands had positive benefit–cost ratios (1.00 to 2.61). TTS and congestion relief were major benefits (50% to 60% and 40% to 50%, respectively, of all benefits). ACC, environmental externalities, and option value benefits were not significant. Agglomeration benefits substantially increased project benefits.
Participation Improves Collective Decisions (When It Involves Deliberation): Experimental Evidence From Kenya
Abstract Citizen participation in decision making has been widely lauded as a method for improving societal outcomes. Deliberative discussion, in particular, is believed to be more transformative than a mere aggregation of individual preferences, leading to more socially optimal decision making and behavior. I report the results from a laboratory experiment with 570 subjects in Nairobi, directly testing the effect of participation in deliberative group decision making on collective outcomes. Participants engage in a group task to earn compensation toward a shared group fund. Randomly assigned treatments vary according to whether decision making over the task to be completed involves: (1) external assignment; (2) non-deliberative majority voting; or (3) consensus through deliberative discussion. I find that deliberation improves collective decision making. Deliberation is also associated with changes in preferences, greater agreement with decision outcomes, and greater perceived fairness. Evidence for behavior change is weaker, but there is some support for further research into the relationship between preference change and behavior change.