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Title: On the change in surpluses equivalence: measuring benefits from transport infrastructure investments
Authors: Meléndez-Hidalgo, José
Rietveld, Piet
Verhoef, Erik
Keywords: Cost-benefit analysisIndirect benefits
Issue Date: 2007
Publisher: EUT Edizioni Università di Trieste
ISTIEE Istituto per lo studio dei trasporti nell’integrazione economica europea
Source: José Meléndez-Hidalgo, Piet Rietveld, Erik Verhoef, "On the change in surpluses equivalence: measuring benefits from transport infrastructure investments", in: European Transport / Trasporti Europei, XII (2007) 36, pp. 107-140.
Series/Report no.: European Transport / Trasporti Europei
XII (2007) 36
Reductions in transport costs resulting from infrastructure improvements generate benefits that can be
measured as surplus changes either at an economy-wide scale (social welfare changes) or, as is common
practice in cost-benefit analysis (CBA), at a transport market level as transport users’ surplus changes. In
this paper we look at an economy with spatially separated markets embedded in a transport network (a
spatial price equilibrium model) to study the equivalence between these two benefit measures. Three
different product market competition arrangements are considered. A similar question and strategy is
presented in Jara-Díaz (1986) employing a two-node network and extreme competition assumptions on
the production side: perfect competition and monopolistic production with arbitrage. We extend his work
by additionally considering perfect collusion (monopoly without resale) and Cournot-Nash oligopoly
under flow-dependent transport costs (i.e. congestion in transport). Numerical simulations in a three-node
network with and without transshipment nodes, illustrate our main results.
Type: Article
ISSN: 1825-3997
Appears in Collections:European Transport / Trasporti Europei (2007) 36/XII

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