A Note on Rail Transit Cost-Benefit Analysis: Do Nonuser Benefits Make a Difference?

Abstract

Rail transit systems in modern American cities typically underperform. In light of high costs and low ridership, the cost-benefit results have been poor. But advocates often suggest that external (non-rider) benefits could soften these conclusions. In this paper we include recently published estimates of such non-rider benefits in the cost-benefit analysis. Adding these to recently published data for costs and ridership, we examine 34 post-World War II U.S. rail transit systems (8 commuter rail, 6 heavy rail and 20 light rail). The inclusion of the non-rider benefits does not change the negative assessment. In fact, sensitivity analyses that double the estimated non-rider benefits and/or double transit ridership also leave us with poor performance readings. Advocates who suggest that there are still other benefits that we have not included (always a possibility) have a high hurdle to clear.

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