Cost benefit analysis of a transport improvement in the case of search unemployment
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Cost benefit analysis of a transport improvement in the case of search unemployment. / Pilegaard, Ninette; Fosgerau, Mogens.
I: Journal of Transport Economics and Policy, Bind 42, Nr. 1, 01.2008, s. 23-42.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Cost benefit analysis of a transport improvement in the case of search unemployment
AU - Pilegaard, Ninette
AU - Fosgerau, Mogens
PY - 2008/1
Y1 - 2008/1
N2 - We examine the implications of search unemployment for the evaluation of a transport investment in a conventional cost benefit analysis (CBA) assuming perfect competition. Lower transport costs induce search over a larger area and longer commuting distances. The expected duration of vacancies is reduced with ensuing benefits outweighing the loss to increased transport. The search imperfection drives a wedge between the marginal product of labour and the wage, such that the final benefits of a transport improvement exceed those of a conventional CBA. Using a simulation model we find these additional benefits may be substantial.
AB - We examine the implications of search unemployment for the evaluation of a transport investment in a conventional cost benefit analysis (CBA) assuming perfect competition. Lower transport costs induce search over a larger area and longer commuting distances. The expected duration of vacancies is reduced with ensuing benefits outweighing the loss to increased transport. The search imperfection drives a wedge between the marginal product of labour and the wage, such that the final benefits of a transport improvement exceed those of a conventional CBA. Using a simulation model we find these additional benefits may be substantial.
UR - http://www.scopus.com/inward/record.url?scp=38949088628&partnerID=8YFLogxK
M3 - Journal article
AN - SCOPUS:38949088628
VL - 42
SP - 23
EP - 42
JO - Journal of Transport Economics and Policy
JF - Journal of Transport Economics and Policy
SN - 0022-5258
IS - 1
ER -
ID: 181872848