THE EFFICIENCY OF CYCLING INVESTMENTS

Eva Willumsen

PUBLIC FUNDS ARE SPARSE

• xx

WE SHOULD INVEST EFFICIENTLY IN OUR TRANSPORT SYSTEM

HOW DO WE MEASURE ECONOMIC EFFICIENCY

• Cost-benefit analysis is the key way to measure the economic efficiency of investments or measures

• What is cost-benefit analysis? – A consistent and systematic quantitative comparison of the effects of an

investment or a measure

• What is the purpose of cost-benefit analysis? – To summarise the advantages and disadvantages of an investment or

measure as the foundation for a political decision

– If advantages (benefits) outweigh the disadvantages (costs) it is an efficient investment or measure

WHY DO WE INVEST IN TRANSPORT?

• Originally to get from A to B

• … then to get from A to B fast

• … last 2-3 decades attention has been given to avoiding the negative externalities of transport

• The later years

… high congestion implies optimisation of the use of the infrastructure

… increase the urban space and recreational value

… for cycling projects also to gain health benefits

• We want to assign an economic value to each of these effects

WHAT CAN WE MONETARISE?

Source: www.kk.dk/sitecore/content/Subsites/CityOfCopenhagen/SubsiteFrontpage/CitizenInformation/CityAndTraffic/CityOfCyclists/socioeconomicbenefits.aspx

COSTS AND BENEFITS

The car is faster and more safe…

… but the bicycle is cheaper, "clean" and healthy

In total the bicycle has by far the lowest costs!

Source: www.kk.dk/sitecore/content/Subsites/CityOfCopenhagen/SubsiteFrontpage/CitizenInformation/CityAndTraffic/CityOfCyclists/socioeconomicbenefits.aspx

COST-BENEFIT EXAMPLE: THE BRYGGE BRIDGE IN COPENHAGEN

Sjællandsbroen

Bryggebroen

Langebro

Knippelsbro

COST-BENEFIT EXAMPLE: THE BRYGGE BRIDGE IN COPENHAGEN

• Investment: 7,5 MEUR

• Internal rate of return 7,6%

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Omkostninger

Skatteforvridning

Branding/turisme

Sundhed

Forlænget levetid

Driftsomkostninger

Anlægsomkostninger

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Gevinster

EksternaliteterNye/overflyttedeUheldKørselsomkostningerTid

Tax distortionBranding/tourismMorbidityMortalityOperating costsInvestment costs

ExternalitiesGenerated trafficAccidentsVehicle operating costsTime

Costs Benefits

Source: www.kk.dk/sitecore/content/Subsites/CityOfCopenhagen/SubsiteFrontpage/CitizenInformation/CityAndTraffic/CityOfCyclists/socioeconomicbenefits.aspx

ECONOMICS IN INFRASTRUCTURE PROJECTS

ECONOMIC RATE OF RETURN

A Femarn Belt BridgeThe Brygge Cyclist Bridge

Rebuilding an intersection

7,6% 6,8%

33%

New railway Copenhagen-Ringsted

5,8%

PERSPECTIVE

• Bicycle projects

… can and should be assessed in the same way as other transport projects

… can yield economic returns on investment that are comparable with other modes of transport

… have an important contribution to public health which should be included in the cost-benefit analyses

… but the methodological foundation for assessing cycling should be developed further as we are only in the early stages

Eva Willumsen

REFERENCES

– www.cycling-embassy.dk/2010/06/10/economic-evaluation-of-cycle-projects/– www.kk.dk/sitecore/content/Subsites/CityOfCopenhagen/SubsiteFrontpage/CitizenInformation/

CityAndTraffic/CityOfCyclists/socioeconomicbenefits.aspx – www.cowi.dk/menu/projects/samfund/velfaerdsoekonomiogservice/Pages/

Samfundsøkonomiskeanalyserafforbedredeforholdforcykeltrafik.aspx