Research 350 - NZ Transport Agency

ECONOMIC DEVELOPMENT BENEFITS OF TRANSPORT INVESTMENT
To some extent, the issues are similar to those explored in the arguments regarding the
‘omission’ of regional benefits from a ‘global SCBA’, the potential problems of double
counting and the issue of the population of standing.
The possibilities, and pitfalls, of using various methods are discussed below.
4.3.1 Role of SCBA
The discussion of national economic impacts in Section 2 concluded that use of SCBA was the
preferred assessment tool in understanding national economic effects of transport
investment.
In principle, many of the points regarding the advantages of SCBA in estimating effects also
apply at the regional level. However, the situation at a regional level is complicated by the
issue of ‘ringfencing’ the SCBA to a particular region/population.
Thus arguments, made by the BTE, and noted above, that regional impacts are typically
included in ‘global’ SCBA’s are essentially valid. However, when the intent is to tease out only
the regional benefits, this is somewhat beside the point, as it still leaves the analyst with the
issue of how to ‘ringfence’ the SCBA.
As noted previously, a key question at the outset is to define the ‘population of standing’, i.e.
the population over which benefits and costs are measured (BTE 1999, p. 149). Is it the
regional population prior to the commencement of the project? Or the final population,
including ‘immigrants’ to the region, once the project is complete? Is there a concern for the
impacts on other regions, or are these to be ‘abstracted away’?
As indicated above, the BTE suggests caution in treatment of in-migrants in any regional
analysis. If in-migrants are to be included, caution should be exercised in attributing benefits
to such migrants through measures such as higher incomes. In particular, if incomes are
used as a benefits measure it would be necessary to measure only the incremental change in
migrants’ incomes relative to incomes they would have received if they stayed in their original
region (BTE 1999, pp. 151-153).
However the BTE’s considerations do not appear to adequately cover the issue of long term
population shifts over the lifetime of a transport infrastructure project (typically 30 years or
so).
The BTE appears to recognise issues such as this and other complications arising from
project ringfencing, noting that highway bypasses may create relocation costs not captured in
a transport SCBA and that:
A transport improvement that revives a declining region could reduce the flow of outmigration
and the associated costs. Proper allowance for this benefit would seem to
require more information than CBAs normally collect — information beyond transport
outcomes.
(BTE 1999, p. 155)
The BTE does, however, suggest that such errors are generally small (BTE 1999, p. 155).
While there is no simple answer to the issue of migratory ringfencing, in general, one would
also expect long term migration patterns for a given region to be captured by transport
demand modelling. That is, such modelling should allow for the presumed migration impacts
of the transport development itself as well as long term population growth.
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