Using the Logsum as an Evaluation Measure. Literature and Case Study

Abstract

Transport infrastructure projects in The Netherlands are assessed ex ante by using cost benefit analysis (CBA) procedures following the OEI-guidelines (CPB and NEI, 2000). The project benefits for travellers are incorporated in the form of changes in demand (e.g. from the Dutch national model system LMS or the regional models NRM) and changes in the generalised travel costs (using values of time from Stated Preference studies to monetised travel time savings), and applying the rule of half. The Transport Research Centre (AVV) of the Dutch Ministry of Transport, Public Works and Water Management has commissioned RAND Europe to perform a study on the use of the logsum (change) as a measure of the change in consumer surplus that results from a transport infrastructure project. RAND Europe has also subcontracted Professor Carl Koopmans of SEO to join the project team. The objective of this project is to: Gain experience and weigh the advantages and disadvantages in a case study using both the classic CBA approach and the logsum approach for project appraisal.