QUANTIFICATION OF THE NON-
TRANSPORT BENEFITS RESULTING
FROM RAIL INVESTMENT
David Banister
Transport Studies Unit
School of Geography and the
Environment, Oxford University
INTRODUCTION
Million passenger kilometres
Rail renaissance – fast, Year EU27 GB
convenient, high quality 1970 326.4 30.6
and environmentally less 1980 366.0 30.5
damaging 1990 400.7 33.4
2000 368.3 38.4
Recent growth in EU and 2005 373.8 41.8
2006 384.0 43.2
GB 2007 46.2
2008 49.0
Problems with cost benefit analysis and the
inclusion of non transport benefits – three levels
MACRO ECONOMIC
EFFECTS
Links between infrastructure investment and GDP –
mainly captured through labour productivity and increases
in employment
Aschauer – production function
Graham – production function and elasticities of
productivity
Rail in UK assumes no effect on the real economy, but the
EU assumes +0.25% on GDP and 0.11% on employment
over 25 years
Oosterhaven and Knaap – computable general
equilibrium models for interregional trade and
location
Channel Tunnel Rail Link – BCR = 1.4
mainly from link to the EU network, increased
with regeneration benefits – BCR = 2.0
St Pancras:
London Terminal
on the CTRL
MESO ECONOMIC EFFECTS
Agglomeration economies and proximity
Inter firm – shared inputs, access to local public goods,
labour, technology and information spillovers
Intra firm – scale and scope economies
Banister and Berechman: Labour markets – level
of participation
Network economies – increased demand from
more competition
Environmental externalities
Cross Rail in London – BCR = 1.8 potential
substantial impacts on Finance and Business
Services – higher productivity and wider labour
markets – increasing returns to scale – BCR = 2.6
London Cross
Rail Design
MICRO ECONOMIC EFFECTS
Land and property values – but linked to contextual
conditions – positive externalities
1. Uniqueness of location
2. Times series analysis – before, during
and after investment
3. Catchment areas – residential and commercial
4. Scale of investment
5. Attribution of impacts
6. Hedonic Pricing and Geographically
Weighted Regression
Schema for the Structural Relationships
Internal Logic Contextual Conditions
Availability of Increases in
development land – plus local land
location in centre, values and 1. Institutional and
corridor or periphery rents and Organisational Factors
rents
2. Market Conditions
Accessibility
Change Land
and Development 3. Location Factors
Property
Markets 4. Quality of Development
Investment in Transport
Public Transport Demand
Central London and the Jubilee Line
Extension – BCR = 1.75 – employment and
property market effects – BCR = 2.75
Canary Wharf
on the Jubilee
Line Extension
The study area highlighting
Southwark and Canary Wharf
underground stations in London
Canary Wharf
Southwark
Value surface created from residential
property transactions (August 2001)
Current public transport
accessibility excluding the JLE
Current public transport
accessibility including the JLE
Decline in mean residential value
from Southwark
Value uplift within 1000m of station
Southwark 2002 – overall £78m
Residential £59.2m
Shops £2.7m
Offices £16.2m
New completions - none
Canary Wharf 2002 – overall £2,117m
Residential £5.7m
Shops £2.1m
Offices £65.4m
New completions – £2,044m
Conclusions
1. Scale of investment – three levels
suggested. Potential problems of double
counting
2. Network effects – and links with
accessibility. Whether changes are
additional or redistributed
3. Non transport benefits – increasingly
important
Transport Non- Overall Proportions
BCR Transport
BCR
CTRL 0.5:1 1.5:1 2.0:1 25:75
CL 1.8: 1 0.8:1 2.6:1 70:30
JLE 1991 0.95: 1 0.8:1 1.75:1 54:46
JLE 2004 1.75:1 1.0:1 2.75:1 64:36