Indirect effects of the capacity expansion of Schiphol airport (352)

Theme Track: Transportation - Infrastructure and Regional Development

Authors:
Vreeker, Ron ; Rouwendal, Jan ; Ubbels, Barry ; Bruinsma, Frank

The construction of new infrastructure is usually a comprehensive and time-consuming undertaking. This is mainly caused by the large costs involved and the variety of impacts.

It is evident that a clear insight in the costs and benefits associated with infrastructure investments is necessary to make an informed decision about such an investment. Governments, still responsible for infrastructure investments, acknowledge this and more investment decisions are nowadays taken based on Cost-Benefit Analysis. In the Netherlands, investments in large infrastructural projects must be preceded by an extensive Social-Cost-Benefit Analysis (SCBA) carried out form a welfare-economic perspective. The aim of this paper is to identify which, and in which way, indirect effects of infrastructure investments, in particular the capacity expansion of Schiphol Airport, need to be included in a Social Cost-Benefit Analysis. Indirect effects are consequences of the transfer of benefits of the directly involved stakeholders (operator, owner and/or users of Schiphol Airport) to third parties (suppliers, etc.). The discussion in this paper focuses upon the question whether these 'transferred' effects need to be included in a SCBA. Is it justified from a welfare economic perspective to include those indirect effects because the might generate additional welfare effects for the Dutch economy? Or, are all welfare effects already included by the measurement of the direct effects of infrastructure investments?

Next to this theoretical exercise, a thorough literature review has been conducted to explore the evaluation techniques available for the measurement of indirect effects in practice. From this literature review it can be concluded that most of the techniques are only related to the measurement of the size of indirect effects and do not specify the welfare implications of such effects.

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