The long term social benefits of urban transit investments: A CBA of the Stockholm Metro

Daniel Jonsson
Mattias Lundberg

Cost Benefit Analysis (CBA) has been a fundament of appraisal in Northern European Countries for decades and is becoming increasingly important in Sweden (Eliasson and Lundberg, 2011). Still, the CBA methodology is a relatively young tool and has been developed for evaluation of smaller infrastructure objects. Also proponents of the CBA method recognise some methodological problems (see for instance Mackie and Preston (1998)), in particular of large infrastructure investments. To undermine the trust in CBA as an accurate decision support, it is often stated in the Swedish debate that the Stockholm Metro, build in the 1950’s and now central for the functioning of the traffic system and commuting, would not have shown a positive CBA outcome if the present methods and tools had been available at the time.

The purpose of this paper is to perform an ex-post cost benefit analysis of the Metro system, the largest urban rail investment in Sweden. The Stockholm Metro has a track length of 105 kilometres, of which 62 kilometres are in tunnels, with a total of 100 stations spread over three lines. The application of CBA to an investment of the size of the Stockholm Metro illustrates clearly that there are certain benefits that may not be sufficiently well captured in standard CBA: land-use benefits, labour market benefits and benefits arising from increased capacity in the road and public transit network. In this paper we try to assess the size of the external labour market effects and land-use effects in the Stockholm Metro case.

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