Research 350 - NZ Transport Agency

2. APPROACHES TO ASSESSING NATIONAL ECONOMIC BENEFITS
• if it is considered that there is strong contextual evidence for the above effects, but the
effects are too complex to model, these effects could be represented ‘below the line’
of the SCBA through qualitative analysis.
The following issues should also be noted in respect of induced/diverted demand, land use
factors, imperfect competition and environmental impacts in developing a ‘best practice’
SCBA:
• Induced/diverted demand – This is the important issue of those discussed above, from
both a technical and presentational viewpoint. While generally small, allowing for
induced demand addresses many of the typical criticisms about ‘omitted benefits’
from SCBA, while also directly dealing with often-cited community concerns regarding
the impacts of generated traffic.
Many studies already employ measures of induced demand. However, in may cases
these are based on ‘off the shelf’ elasticities or else appear as model outputs from a
transport demand model, where behavioural assumptions are unknown (or
questionable). Though induced demand effects may be small, there is obviously always
a case for better estimation of impacts based on context specific information.
Depending on the study in question (and the resources available) use of direct
measures of induced demand, such as those derived from stated preference work and
other survey work, should be preferred.
• Logistics effects – As indicated above, unit values incorporating some of these are
already in existence. An example is Austroads’ inclusion of freight travel time
allowances in its value of time measures though more work needs to be done in this
area and it is arguable that reliability impacts should also be included. Such unit values
should be employed if available.
As indicated, to the extent that there is a strong argument for additional logistical
impacts arising from improved logistics, beyond those incorporated in unit values,
these should be considered based on strong contextual evidence, with a default ‘no
benefits’ position.
• Agglomeration and other land use effects – The empirical case for inclusion of
agglomeration benefits does not appear to be strong. Further, an approach which
values these via divergent values of travel time savings is inconsistent with Transfund's
equity based approach.
Land use issues connected with the property and labour markets have been noted
above. Regardless of whether a LUTI style model is ever developed in New Zealand, if
additional property and labour market (dis)benefits are claimed, questions of double
counting and parsimony must be carefully examined.
• Imperfect competition – The effects of this within a New Zealand context may be even
smaller then SACTRA’s past estimates for the UK. Allowance for imperfect competition
should be considered only in specific cases where there is strong contextual evidence
that such effects exist (e.g. breakdown of regional monopolies due to transport
improvements).
• Environmental impacts – Environmental impacts generally tend to be modest at best
within the framework of SCBA. If monetised values exist these can be incorporated
within the SCBA. If no monetised values exist, non-monetised values can be
incorporated as ‘below the line.’ qualitative indicators.
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