An economic think-tank says that the current way of working out the economic impact of roading projects is not working.
“Standard cost-benefit techniques significantly under-estimate the costs and benefits from transformational infrastructure projects like motorways.” says the New Zealand Institute of Economic Research.
NZIER is a non-for-profit incorporated society and devotes some of its resources to undertake and make freely available economic research aimed at promoting a better understanding of New Zealand’s important economic challenges.
It has released a report into the importance of how transport changes land use, and how this affects the assessment of transport projects.
“Transformational projects change economic activity, regional population, and land use – changes missed by standard cost-benefit techniques,” the Institute says.
“For instance, a standard cost-benefit appraisal of Transmission Gully ignores whether Transmission Gully increases the number of people living along the Kapiti Coast and the costs and benefits associated with this.”
The NZIER has researched ways to broaden the scope of appraisals. These are outlined in its public discussion paper: “Appraising transport strategies that induce land use changes” available on the NZIER website HERE.
