The indirect effects of a project are those that occur in the rest of the economy. The direct effects (e.g. transport costs reduction) are measured in the primary market, and these effects affect other markets, where transport is an input or where the products of these secondary markets are complements or substitute of the transport service in the primary market. The accounting of indirect effects is only needed when there are distortions in the secondary markets or when they are a mere relocation of economic activity. This paper addresses the analysis of the different types of indirect effects with the aim of differentiating the genuine effects from double counting.

This working paper has two parts. In the first part, the main results from the literature on the level of error in predictions of the demand for transport will be presented. The second part is a summary of the prediction models applied in Spain by mode of transport.

Demand forecasting is a key factor in project evaluation. However, the evidence reveals significant prediction errors. This paper aims to offer a review of the main issues that demand forecasting should consider with the aim of avoiding errors that might distort the result of the evaluation. The text is organised into three major sections. The first offers a guide to the factors related to the project’s impact on demand. The second analyses the main modelling approaches, and the third outlines alternative ways of dealing with uncertainty associated with demand forecasting.

In the evaluation of transportation infrastructure projects, some non-tradable goods such as time are usually key determinants of the result. However, obtaining monetary values for these goods is not always easy. For this purpose, this paper presents an approach that combines Bayesian posterior prediction and meta-analysis. This methodology will allow us to obtain predictive distributions of the monetary values for these type of goods. Therefore, uncertainty is formally considered in the analysis. Moreover, the proposed method is easy to apply and inexpensive both in terms of time and money. Finally, an illustrative application to the value of travel time savings is also presented.

Any public intervention in transport will necessarily affect transport infrastructures producers’ costs, transport services producers’ costs and users’ costs. This document tries to serve as a basic reference for the socioeconomic evaluation of such intervention regarding its impact in terms of costs. The starting point has been a revision of fundamental economic principles that should be borne in mind in the determination and measurement of the opportunity cost of resources applied to the transport activity. The next step has been an analysis of each type of cost with a modal perspective.

In the evaluation of transport projects it is crucial to analyse both the capacity of existing infrastructures and capacity increases associated to new projects. In particular, the relationship between capacity and actual demand should be measured, which will allow us to identify congestion problems, and more importantly, to analyse such a relationship in the medium term future scenarios with/without investments or with different alternative projects. In this document we undertake a review of theoretical models of infrastructure capacity and the international empirical evidence, with the aim of providing useful information on how to measure capacity and assess its impact on the infrastructure level of service through functional relationships between the degree of capacity utilisation and users’ travel times for the main modes of transport.

This document is devoted to the analysis of the major environmental impacts caused by transport projects that are not captured by the market, as well as to the review of economic valuations of these impacts that have been estimated, suggested or applied in previous works for the analysis of transport projects in Spain.

The purpose of this paper is to present, in a simplified way and as free as possible of specialised terminology, the main procedures for the economic valuation of those costs and benefits of transport projects that are not captured by the market and to show the theoretical foundations behind these procedures.

Any public transport infrastructure project causes an heterogeneous impact on different socioeconomic groups and geographic areas. This paper describes the consequences of a project of this kind on distributional and spatial equity and it explores a wide spectrum of methods to deal with them. More precisely, the following models are discussed: hedonic price approach, cost-benefit analysis based methods, spatial need indices, multicriteria methods and industrial location models. The choice of method for equity assessment depends on the nature of each case study and the available information.

Large infrastructure projects usually require co-financing by the central government. In a context of asymmetric information, the way in which projects are financed might encourage regional governments to have an optimistic bias when presenting projects that are competing for national funds. On the one hand, in this document it is shown that if the central government funds a percentage of the project costs, the result is that some projects that should not be financed are finally funded, and some other socially desirable projects are not funded or inadequately financed. On the other hand, the document presents some possible solutions to this problem of asymmetric information.

The construction, maintenance and operation of transport infrastructures require important amounts of public funds; thus, multiple possibilities can be considered when financing. Nevertheless, the way projects are funded has remarkable implications in terms of incentives and therefore considerably affects the estimation of the costs and benefits of a project. Avoiding the importance of concession contracts can lead to estimation errors that would alter the result of the cost–benefit analysis. The purpose of this paper is to analyse deeply the incentives inherent in the institutional design in which transport projects are financed, to try to quantify the consequences of using a particular financing mechanism.