How to deal with the encroachment costs in road investment CBA
Abstract: An important basis for decisions regarding road investments is Cost Benefit Analysis (CBA), where all costs and benefits should be taken into account and expressed in monetary terms. A valuation of the cost for the encroachment caused by a new road in, for example, a recreation area or a residential area is, however, missing in road investment CBA. The purpose of this thesis is to develop approaches to deal with the encroachment costs. More specifically two approaches are developed.One approach is ”cost transfer” for typical cases. With this approach the encroachment cost is estimated ex post for a number of existing roads within each typical case. The results are to be used to estimate a calculation formula to use for CBA of planned road investments where the encroachment can be referred to a particular typical case. The typical case ”barrier to water” was chosen for a pilot study with the aim of developing the method for data collection, and study what is most important for the encroachment cost per affected individual.The other approach is a method, developed in the thesis, for estimating the encroachment cost ex ante for each specific object. The method is called COPATS, ”Combined Opinion Poll and Travel Survey”. It makes use of the fact that roads mean both positive and negative effects to a different degree for the affected people. Data of the residence location, visiting frequency in the encroachment area and travel pattern is collected by a postal questionnaire before deciding on a road investment. In the same questionnaire it is also asked whether the respondent is for or against the planned road. The encroachment cost can be estimated from the respondents´ balancing of the benefit of travel time savings, and possibly some other positive effects, against the negative encroachment caused by the planned road.A conclusion is that both alternatives seem to be possible ways of including encroachment costs as part of road investment CBA. To estimate calculation formulas for cost transfer in some common typical cases, a large number of further encroachment cost studies must though be made. COPATS is closer to practical application, but needs to be further developed in collaboration with road planners.
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