Planning

A better CBA won’t help if the decision came first

Cost-Benefit Analysis (CBA) has become a central part of what we do in transport. This research examined criticisms of CBA and whether its use can be improved using 75 publications and expert workshops involving 16 specialists.

Key Takeaways

• The analysis categorises criticisms into four groups:
  • Fundamental limitations of CBA
  • Shortcomings in practical application
  • Issues related to debatable policy questions
• Systemic blindness/projects/policies considered in isolation
• Alternatives not considered, or considered too narrowly
• Preference for easy-to-implement policies
• Avoidance of controversial policies
• No explicit check on policy goals
• Equity concerns ignored
• Planning overlooks important trends
• Data availability leads to prioritising roads
  • Decision-making challenges
• Debatable decisions, at least partly due to making use of CBA

• These four categories match the four core stages of policy making, evaluation and decision making:
  1. Formulate policy questions
  2. Select evaluation framework
  3. Apply evaluation framework
  4. Decide
• Possible ways to address CBA problems:
• Fundamental problems with monetising effects:
  • If one rejects monetising: do not apply a CBA
  • If one has fundamental problems with monetising some effects: do not monetise, but list effects that are not monetised in a CBA
• Neglect of distribution effects:
  • Explicitly report important distributions in a CBA
  • Some distributions can be monetised making use of the concept of the Willingness to Pay For Fairness
  • Add a separate equity analysis to a CBA
• Neglect of wider ethical aspects:
  • Check explicitly if these occur, and if so: report separately and add to a CBA
  • ‘Undemocratic’ nature: replace values and use other principles than consumer preferences
• Practical problems with monetising effects:
  • Reduce these problems by developing and applying better methods
• High discount rates or no differentiation in discounting based on the type of effects:
  • Adapt discount rates, differentiate discount rates by effect types
  • Add sensitivity analyses making use of different discount rates
• Some effects are missing:
  • Add if possible, report separately if not possible
• Value of travel time savings:
  • Use appropriate values or do not include travel time savings in calculations.
• Biases in transport models used - general:
  • Improve transport models and apply ex ante evaluations (CBA and others); correct using expert judgment.
• No LUTI model used whereas land use changes can be expected:
  • Develop (if not available) or apply (if available) a LUTI model if substantial land use changes can be expected; correct by making use of expert judgment.
• Unclear if positive utility of travel is correctly dealt with:
  • Communicate explicitly if included. Correct estimations of travel time gains if not included.
• Accessibility effects are largely ignored:
  • Report accessibility effects
  • Monetise if possible
• Optimism bias regarding cost and benefit estimates:
  • Develop and apply better methods for cost estimates
  • Develop better models for benefit estimates, or include more realistic assumptions in modelling
• Biased effect estimates if cause – effect relationships are non-linear:
  • Apply state-of-the-art scientific methods that enable estimates of non-linear effects
  • Do more research

Comment

We spend a lot of money on CBA for transport projects and policies, theoretically to improve decision-making. Improving CBA calculations also assumes this will lead to better decision-making.

However, many decision makers use a CBA above 1 to justify a project they have already decided on, while ignoring a CBA below 1 and carrying on anyway.

On the other hand, I've used CBAs to improve decision-making and have seen others do the same.

To create a step change in decision-making, we need to reduce the number of transport projects politicians commit to before they have been properly analysed, perhaps by creating truly independent agencies to help to decide on projects.

What Next?

Is your CBA really improving decision-making?

Road Pricing

Mobility credits could sell road pricing, if people can understand them

I have seen the idea of providing mobility credits appearing in a number of contexts recently. Professor David Hensher at the Institute of Transport and Logistics Studies (ITLS) has set out his thoughts in this article.

Key Takeaways

• Distance-based road charging is more likely to win public support if it comes with rewards that give drivers a way to cut what they pay, rather than penalties alone.
• Hensher proposes pairing a per-kilometre charge for all cars (the “push”) with tradeable mobility credits earned for more sustainable travel choices (the “pull”).
• The aim is to shift the conversation from costs and penalties to credits and incentives, so people adjust their car use by choice rather than by force.
• Until now, research has treated road pricing and mobility credits as separate options, and this piece sets out how they could work together as one policy.
• Credits would act as a simple internal currency (for example, 1 credit = 10 cents) that can be spent on road charges or public transport fares, or traded with other users.
• In the Sydney example, drivers would pay 3 cents/km off-peak and 7 cents/km in peak periods, plus 50% in the CBD or on congested routes.
• Credits would be earned for each public transport trip (more in off-peak times), for each kilometre walked or cycled, and for verified carpooling, with a bonus per trip for electric vehicles.
• Credits would expire after 90 days to stop hoarding and keep people engaged, and low-income and mobility-impaired people would get monthly starter credits.
• Areas poorly served by public transport would pay less, or be exempt, until services improve, which reflects how central fairness is to any pricing reform.
• Funding is a key hurdle, because credits reduce road-charging revenue, so the cost will need to be shared with the groups that benefit.

Comment

Dealing with the public opposition to RUC is going to be critical for successfully implementing a broad-based road pricing system.

If tradable mobility credits can help to overcome these challenges, then they will be well worth it.

However, while the technical details are being researched, I have yet to see much thought given to how to explain this simply to consumers (or politicians) and minimise the friction consumers face in engaging with the scheme.

Most people are not going to want to spend a lot of (or even any) time trading credits. AI agents may be able to do this for people based on their preferences, suggesting ways to optimise their mobility outcomes.

What Next?

How can we explain tradeable mobility credits in a simple way?

Road Safety

Who speeds, where, and why? What 300,000 Italian vehicles reveal

How do socio-economic, geographic, and mobility factors affect speeding? This research looked at Italy using data from over 300,000 vehicles.

Key Takeaways

• Provinces with a higher proportion of drivers aged 25–34 tend to be more compliant with speed limits. The results suggest that demographic composition itself creates safety-relevant contexts.
• Drivers obeyed limits far better on motorways and expressways than on 30 km/h urban streets (by roughly 25–36 percentage points).
• The dominance of road design factors in determining operating speeds reinforces that engineering interventions are the primary policy levers for speed management.
• Socio-economic factors identified in this study, while statistically significant, act as secondary modifiers of behaviour that occurs within constraints largely set by road design.
• Successful implementation of 30 km/h zones requires comprehensive packages including physical traffic calming, visual treatments, enhanced signage, and visible enforcement, rather than signage alone.
• Areas with more high-school graduates had lower and steadier speeds, but areas with more university graduates had higher speeds, so one general education campaign won’t work for everyone.
• Areas with more public transport had lower operating speeds, which makes road safety a legitimate benefit to count when making the case for public transport investment.
• On high-speed roads, uneven speeds raise crash risk, so managing for a smooth, steady flow matters, making a strong case for targeting behaviours that create variability, such as tailgating or erratic lane-changing.
• The study found six distinct regional profiles, so tailored local strategies might work better than one national approach.

Comment

There is a lot of debate around whether reducing speeds to 30km/h (20mph) requires physical interventions. Compliance is certainly higher when physical interventions are used, but reducing speed limits does have an effect, and evidence from places like Wales shows it saves lives immediately.

This highlights the importance of understanding what speed limits are for in different contexts. Should they be set for increasing compliance, improving road safety, journey time 'efficiency' and/or something else, such as the safety perceptions of cyclists and pedestrians? Obviously, a motorway serves a very different purpose from a residential street and so do its speed limits.

What Next?

How are you tailoring your road safety strategies for speeding across different contexts?

Quick Adventures in Transport Wonderland

Here is what else I came across this week:

• ​Autonomous Vehicles Aren’t That Special - a blog discussing how we should think about AVs.
• ​Emergency Streets Pilot Program - this city is undertaking a pilot into "Emergency Streets".
• ​Making the most of city life for older people: 3 debunked mobility myths - a Conversation article discussing mobility for older people.

Tool

​This design guide explains how to design for cars in people-centred places.

Jobs

Jobs for Transport Leaders

​Here is a link with jobs around the world, specifically designed for transport leader readers. Use the filter to find jobs that match what you are looking for.