Cost benefit-analysis of a transport improvement in the case of search unemployment Report as inadecuate




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Abstract

We examine the implications of search unemployment for the evaluation of a transport in-vestment in a conventional cost benefit analysis CBA assuming perfect competition. Lower transport costs induces search over a larger area and longer commuting distances. The ex-pected duration of vacancies is reduced with ensuing benefits outweighing the loss to in-creased transport. The search imperfection drives a wedge between the marginal product of labour and the wage, such that the final benefits of a transport improvement exceed those of a conventional CBA. Using a simulation model we find these additional benefits may be sub-stantial.



Item Type: MPRA Paper -

Original Title: Cost benefit-analysis of a transport improvement in the case of search unemployment-

Language: English-

Keywords: Cost-benefit; transport; search unemployment; welfare-

Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R42 - Government and Private Investment Analysis ; Road Maintenance ; Transportation Planning-





Author: Pilegaard, Ninette

Source: https://mpra.ub.uni-muenchen.de/10037/



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