Advancing Appraisal: from Transport Economic Efficiency to Land-use/transport Economic Efficiency
D Simmonds, David Simmonds Consultancy/Heriot-Watt University, UK
This paper will review the issues that arise in transport appraisal's treatment of land-use and other non-transport effects. It will show where new interpretation of standard results will suffice, and where larger methodological changes are needed.
Present practice in appraisal generally assumes fixed land-uses and economic activities for each future year considered. So far as impacts on users are concerned, it concentrates on estimating the benefits arising from changes in the generalized cost of travel. It is then conventionally assumed that all other markets are perfect, and that any further effects outside the transport system may change the form and the distribution of benefits but do not change their magnitude. Hence the possibility that, for example, much of the benefit of an investment may be captured by property owners in the form of higher rents is implicit in the theory underlying the analysis, but is rarely made explicit in technical reports on appraisals, and still less often admitted in public discussion of transport schemes.
The fact that markets are imperfect and that this may distort the assessment of benefits has been recognized for a long time, and was highlighted in particular by SACTRA in their 1999 report on Transport and the economy. However, the response to the problem has been limited to the recognition of a fairly narrow set of "Wider Impacts" (in UK practice and in some other countries). There is increasing criticism of the fact that benefits arising from land-use impacts appear to be ignored ? if they are not excluded, they are hidden as implicit in transport benefits - and in particular of the fact that the debate about the benefits of transport investment is often couched in terms of "time savings" when there is considerable evidence that opportunities for faster travel are, in general, used to facilitate further travel rather than simply to make the same journeys more quickly.
Within this debate there is considerable confusion, particularly about what is or is not included in conventional analysis of user benefits. This paper will try to reduce this confusion, in particular distinguishing which issues can be dealt with by re-interpreting conventional analysis, and which ones require more substantial changes to our methods; and for each of these it will discuss what needs to be done and what progress is being made towards a more complete "land-use/transport economic efficiency" analysis which would address the criticisms of current practice.
Association for European Transport