Cost-Benefit Analysis of Information Acquisition in Transportation Planning

Abstract

This paper presents an analytical methodology, based on the principles of statistical decision theory, for the cost-benefit analysis of information acquisition in transportation planning. Application of this methodology provides guidelines for determining the optimal level of resources to be invested in the collection of information used for planning transport system changes. The rationale of investing resources in transport facilities and the philosophy of evaluating such investments are discussed. The context of the economics of acquiring information to support such analyses is pointed out. Application of the methodology developed to a realistic problem is described. The results of trade-offs between the reduction in social costs of transportation— the benefit, and the cost of information acquisition— the cost, are discussed. Thus, the role of a formal cost-benefit analysis of information acquisition in planning for transport system changes is pointed out.