The fully economic evluation for transport infrastructure project

Abstract

By combining with the contingent valuation method and the fully economic evaluation approach, a new model for transport project evaluation is constructed. Different from the traditional cost-benefit analysis (CBA), this new model can easily transform the non-market goods into monetary terms and incorporate them onto the evaluation process. In the empirical case of Pinling interchange, two scenarios, with and without traffic regulations, are constructed. The estimation results show that by comparing with the fully economic evaluation approach, the traditional CBA would underestimate the environment effect and cause a biased policy decision. Moreover, since the resident interest groups could gain significant benefits, they incline to form pressure groups to lobby for the regulation release. On the other hand, although the water-use interest group bears the relative high cost at aggregate level, only a slight amount is paid by the individual that explains their indifferent attitude.