In the UK and various other countries, methods have been developed which try to calculate the economic costs and benefits of new road (and other transport) schemes. As I understand it, these calculate costs such as
- land take
against benefits, such as
- travel time savings for different road users
- reduced vehicle operating costs
- reduced accident costs
The methods then discount the costs and benefits over the lifetime of the project to calculate an economic rate of return for the project which is compared with an acceptible rate of return.
Travel time savings are an important part of the “plus” side of the equation. In the UK for example the analysis adopted seems to be quite complex (papers on the UK method are available from the UK government website (here). However perhaps there are weaknesses in the basic theory.
Value of accidents
I discussed elsewhere (here) the question of the value of a life, and quoted a paper by Ezra Hauer (ref. 978), which says e.g.
“Because we are unsure what the right value (of life) is, the chance that the chosen value is tolerably accurate is small”.
I would also argue that the value of a life should arguably be the same in all studies, and not different depending (for example) on whether the person died in a road traffic accident or due to a medical slip-up in hospital.
Congestion pricing and road scheme pricing
Wikipedia (here) says that:
“Congestion pricing or congestion charges is a system of surcharging users of public goods that are subject to congestion through excess demand such as higher peak charges for use of bus services, electricity, metros, railways, telephones, and road pricing to reduce traffic congestion”
Basically, congestion pricing is a method to charge motorists as a means of making them use the roads less. In terms of social justice it is likely a bad idea. As John Whitelegg says, on charging for the use of road space, (this) …. will save time for one group (wealthy motorists) at the expense of other groups (such as poor car-owners or pedestrians) and at the expense of greater levels of space inefficiency (see ref. 1974).
In terms of travel time savings, there seems to be some contradiction in that cost benefit analysis of road schemes the aim is to save drivers money and in congestion pricing the aim is to charge drivers money.
Travel time and accessibility
If congestion pricing aims to reduce the amount of road traffic, perhaps in road cost-benefit analysis the aim should be the same. This would mean that a new road scheme which reduces total traffic (defined as vehicles * travel distance)would be a good idea.
Bias towards motorists
A publication by the UK’s Department of Transport (ref. 1520) gives some values for working time.
It seems that, from this table the market price for car drivers is put at 30% higher than for walkers – which immediately puts a cost/benefit bias in favour of drivers. There seems to be no reason why one person’s time is more valuable than another. Nor does there seem to be any reason to argue that if a person sits behind the steering wheel of a car he will have a time value of £ 27,06 sterling. Surely someone driving a car doesn’t have any time value at all – or even, since car driving is time lost to working, the actual time value should be a negative, – £ 27,06.
David Metz (ref. 725) has an interesting comment on travel time saving, when he says that
“In the long run, it can be concluded that allthe possible time saving is used for extra travel, consistent with the conservationof average travel time”.
I suspect that any form of analysis which argues that travelling at higher speeds over greater distances is a benefit, needs some radical re-thinking. Otherwise we should be giving free cars to everyone.
725 – UK, David Metz, “The myth of travel time saving“, Transport Reviews, 2008
978 – USA, Ezra Hauer, “Can one estimate the value of life or is it better to be dead than stuck in traffic?” Transpn. Res.-A. Vol. 28A, No.2, pp.109-118; 1994
1520 – UK, “Value of time and vehicle operating costs“, TAG Unit 3.5.6, Department of Transport, 2014
1974 – UK, John Whitelegg, “Time pollution“, The Ecologist, 1993