Estimation of increased regional income that emanates from economically justified road construction projects

Abstract

This article identifies the possible development benefits than can emanate from economically justified road construction projects. It shows how the once-off increase in regional income resulting from investment in road construction projects, and the recurring additional regional income resulting from the use of new or improved roads can be estimated. The difference is shown that exists between a cost-benefit analysis (to determine how economically justified a project is) and a regional economic income analysis (to estimate the general economic benefits that will be developed by investment in and usage of a road). Procedures are proposed through which the once-off and recurring increases in regional income can be estimated by using multiplier and accelerator analyses respectively. Finally guidelines are supplied on the appropriate usage of input variables in the calculation of the regional income multiplier.