Are CBA Results Robust?: Experiences from the Swedish Transport Investment Plan, 2010-2021

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Mattias Lundberg
Jonas Eliasson

The use of Cost-benefit analysis (CBA) as a tool for choosing between suggested transport investments is often questioned. Many argue that the results completely rest on what assumptions are made. This paper studies whether this is true for two sorts of assumptions; climate policy assumptions and benefit valuations. First, we study how much the CBA ranking is affected by varying the relative weight of different types of benefits. The valuation of travel time, traffic safety, emissions and freight benefits are systematically varied for 480 suggested road and rail investments in the latest Swedish transport investment plan. The conclusion is that the ranking is surprisingly stable. The balance between road and rail is also robust. Second, we vary the relative weights within a benefit type by differentiating the value of time. This exercise has an even smaller effect on ranking. Last, scenario assumptions relating to future climate policy options are altered. Even rather drastic assumptions, such as a doubled oil price, change the benefits with only a few percent and the rankings are hardly affected at all. The exception seems to be car ownership. In conclusion, our study suggests that decision makers can feel secure that following the CBA methodology will lead to sound investments being prioritized. The top-ranked investments stay more or less the same in all sensitivity tests.

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