Leo Dobes: A simple sanity check on ACT's light rail

The Canberra Times, July 17, 2014, Times2 p5


A rigorous social cost-benefit analysis would not include jobs per se as a benefit: the laabour may have been better used elsewhere; have people left other jobs to join the project; social benefits foregone; in times of full employment more jobs only increases the cost of labour.
If property prices do rise along the route, there may be an offsetting fall in other areas. Double-counting occurs because increased property prices only occur due to perceived benefits in reduction in costs.
Reduced congestion attracts more road users.
It will be interesting to see if the government's new evaluation of light rail, due around October, will include other "social costs", as well as creative identification of additional benefits. For example increased rates levied to pay for the light rail and possible loss of trust in political institutions and lower social cohesion.
To get a true picture of the project's relative social value, a comparison would be required with alternatives such as better utilisation of buses, or improved health, education and other services.

Leo Dobes: Beware the optimism bias in public transport plans

The Canberra Times, August 13, 2014, Times2 p5


How can we put a figure on the likely number of passengers who will use the Gungahlin tram?
Choosing only apparently successful cases risks a salty diet of optimism bias, especially if Canberra conditions and population aare different to the example used.
Current observed behaviour will not provide a reliable guide to people's behaviour.
Choice modelling (in which respondents choose between different prices they would be willing to pay for different characteristics of a new product) remains the best available survey technique.
Canberrans do not seem to be privy to the actual questions used in the government's survey that reportedly found that 55 per cent favoured the light rail project. Surveys that do not require respondents to indicate how much they would be prepared to pay for each additional characteristic cannot generate realistic results.
In the case of the light rail project it would be important to include the cost of each option (e.g. additional property rates), not just the fare, otherwise the results would be biased.