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Cost-benefit analysis has become a widely used and well developed tool for evaluation of suggested transport projects. This paper presents our view of the role and position of CBA in a transport planning process, partly based on a brief survey of a number of countries where CBA plays a formalised role in decision making. The survey shows that methodologies, valuations and areas of application are broadly similar across countries. All countries place the CBA results in a comprehensive assessment framework that also includes various types of non-monetised benefits. An important advantage with using CBA is that it is a way to overcome cognitive, structural and process-related limitations and biases in decision making. Some of the main challenges to CBA and to quantitative assessment in general lie in the institutional and political context. There is often a risk that CBA enters the planning process too late to play any meaningful role. This risk seems to increase when planning processes are centred around a perceived problem . If the problem is perceived as important enough, even inefficient solutions may be viewed as better than nothing, despite that the definition of what constitutes a problem is often arbitrary

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Substantial investment has been made at national and European level in transport infrastructure over the past 50 years and is likely to continue in the future. The need to appraise transport projects in economic and social terms has developed alongside this in both scope and complexity. The state-of-the-art in the economic appraisal of transport projects is reviewed, progress is assessed and future challenges are identi® ed. The review addresses the general framework, treatment of major impacts, presentation of outputs and issues such as uncertainty. It draws on national practice in Western European countries, which varies substantially re¯ecting a range of cultural and economic diOE erences. Some points of commonality exist and the principle of monetizing direct transport impacts is generally accepted. Progress has been made towards the measurement of environmental impacts, but the assessment of the wider impacts remains underdeveloped. Increased sophistication and complexity has brought increasing data and presentation requirements, where computerized decision support methods have potential. Many challenges exist for the future of appraisal and the review is concluded with a discussion of some key issues. At the heart of these is the continuing debate over the relative roles of national and European government in decision-making and resource allocation.

It is claimed that transport infrastructure projects have network effects which are not taken into account in the appraisal of these projects. This paper reviews the concept of network effects, relates this to transport appraisal practice, and links to the concept of 'total economic impact'. The limitations of transport modelling and appraisal in estimating total economic impact are reviewed. Good quality appraisals should be capable of picking up relevant network effects in the transport market, but the state of the art remains limited on the linkages between transport and the wider economy.