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The BCA of HSR: Should the Government Invest in High Speed Rail Infrastructure?

Published online by Cambridge University Press:  07 June 2021

Ginés De Rus
Ginés De Rus*
Affiliation:
University of Las Palmas de G.C., Spain, and University Carlos III de Madrid, Spain
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Abstract

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This paper deals with public investment in High-Speed Rail (HSR) infrastructure and tries to understand the economic rationale for allocating public money to the construction of new HSR lines. The examination of data on costs and demand shows that the case for investing in HSR requires several conditions to be met: an ex ante high volume of traffic in the corridor where the new lines are built, significant time savings, high average willingness of potential users to pay, the release of capacity in the conventional rail network and airports. On the contrary, net environmental benefits seem to be insignificant in influencing the social desirability of HSR investment. This paper discusses, within a cost-benefit analysis framework, under which conditions the expected benefits could justify the investment in HSR projects.

Keywords

infrastructurepublic investmenthigh speed railbenefit-cost analysis
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 2 , Issue 1 , 03 January 2011 , pp. 1 - 28
Copyright
Copyright © Society for Benefit-Cost Analysis 2011

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