Past and Future of Cost-Benefit Analysis for Railway Projects in Japan

Abstract

Since 1960’s theoretical evaluation methods for transport investment have been developed; such as user surplus approach, hedonic approach and regional econometric model etc. However, in the past, cost-benefit analysis was little adopted in decision-making process in transportation sectors in Japan. Recently, Ministry of Transport decided to use the cost-benefit analysis for project appraisal. This paper reviews the history of theoretical and practical cost-benefit analysis focusing on railway investment, and discusses on issues of research for the future from theoretical and practical viewpoints.