Effects of model input uncertainty on costbenefit

Important results from the project

Effects of model input uncertainty on costbenefitThe objective of this project is to determine if - and if so to what extent - assumptions and predictions of future developments affect the profitability of different investments (in terms of generated cost- benefit net social surplus). In other words - how assumptions about the future affect the order of precedence of CBA- assessed objects. In cases when the assumptions are results of political decision-making (e.g. taxation of fuel) - knowledge of the robustness of these calculations is of interest because it shows how the CBA- assessment (i.e generated net social surplus) of different investments is affected by these decisions.

Expected long term effects

Knowledge of how sensitiv the order of precedence of these objects is to changed assumptions and predictions is important. For example - this knowledge can be used when deciding how much effort to put into making specific forecasts of certain aspects of future development etc. Hence, this project will result in a base on which better founded decisions for investments can be made. It will also help to save valuable governmental resources by showing which predictions and forecast to focus on in the process of gathering information before making important decisions in the field of transport-policy.

Approach and implementation

A number of sensitivity analyses are preformed in which uncertainties of the CBA are handled in a formalized manner.