Economic evaluation of urban LUTR policies

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Economic evaluation of urban LUTR policies

• Presentation
• The theoretical analysis
• The development of the Economic Indicator Module
  (EIM)
• The description of the economic indicators

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Economic evaluation of urban LUTR policies

• Objectives
• Increase comprehensiveness
• Account for the whole range of benefits
  associated to a policy
• Provide an harmonised approach valid for the
  different LUTR models

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Economic evaluation Theoretical analysis
The problem How much should the economic
analysis be extended to cover the spatial
aspects? How to include as far as possible all
the impacts of a urban land use and transport
policy? How to avoid to account for land use
benefits, which were already implicitely
accounted as transport benefits?
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Economic evaluation Theoretical analysis
The safe approach A fully specified transport
cost benefit analysis provides a sufficiently
good approximation for the size of the total
economic impacts CBA classical indicators are
integrated by new ones accounting for the
distribution of the benefits the externalities
and the productivity changes induced by the
policy.
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Economic evaluation Theoretical analysis

• Four main points of analysis
• Timing social opportunity cost rate
• Distribution harmonised models categories
• Externalities net costs for air pollution,
  climate change, accidents and noise
• Impacts on land use and local economies
  accessibility indexes as measures of
  competitiveness changes for the study area

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Economic evaluation - EIM software

• The Economic Indicator Module (EIM) is part of
  the PROPOLIS analytical framework. The module
• collects data from case city LUTR models and
  from the raster module
• requires user specific input data
• produces harmonised economic indicators for the
  USE-IT tool as well as CBA standard output for a
  detailed policy economic analysis

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Economic evaluation - EIM software
PROPOLIS analyticaI framework
EIMEconomic Indicator Module
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Economic evaluation - EIM software
EIMEconomic Indicator Module
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Economic evaluation - EIM software
EIM Country variables sheet
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Economic evaluation - EIM software
EIMeconomic indicators sheet
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Economic evaluation - EIM software
Input - Case city specific parameters Value of
time (by mode of transport and trip
purpose) Discount rate Conversion factor from
financial to economic costs (by mode of
transport) External costs of gas emissions (by
zone type) External costs of accidents (by mode
of transport) External costs of noise emissions
(by mode of transport)
Input - Policy specific parameters
Timing Investment / maintenance / operating costs
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Economic evaluation - EIM software
Input - LUTR models variables Passenger-kms (by
mode and by SE group) Travel Times (by mode and
by SE group) Travel Costs (by mode and by SE
group) Transport Operator Revenues (by
mode) Floors Prices (by destination and
urbanisation level) Population (by
zone) Employement (by zone) Average travel time
matrix
Input - Raster module variables Gas Emissions (by
type, mode and urbanisation level) Noise
emissions (exposed population by noise thresholds)
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Economic evaluation - EIM software
Indicators calculation In order to harmonise and
compare indicators of different case cities,
these are computed per capita. All impacts are
converted in economic values and benefits/costs
flows are discounted to the initial year. All
indicators are calculated as differences between
the policy scenario and reference scenario.
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Economic evaluation - EIM software

• Indicators
• ETIC Transport Investment Costs
• ETUB Transport User Benefits
• ETOB Transport Operator Benefits
• ETGB Government Benefits from Transport
• ETAC Transport External Accident Costs
• ETEC Transport External Emissions Costs
• ETGG Transport External Greenhouse Gases
• ETNC Transport External Noise Costs
• EEEI Economic Index

Disaggregation Study area Study area Mode of
transport Mode of transport Mode of transport
Zone type Study area Zone type
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Further indicators - EIM software
The EIM software produces also two indicators
which are then used in the calculation of the
Social Sustainability Index.
Indicators TGC Transport Generalised Costs
variation SOPG Productivity Gain from Land Use
Disaggregation SEG Study area
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Economic evaluation - EIM software
ETIC Transport Investment Costs The indicator
is a measure of the investments needed for the
implementation of the policy. It includes also,
for the whole period of the analysis, the
operational costs and the costs of maintenance.
It is calculated in Euro per inhabitant
actualised to present year
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Economic evaluation - EIM software
ETUB Transport User Benefits The indicator is
a measure of the surplus variation of transport
user. The calculation is based on the theory of
variation of consumer surplus. It provides
information on how benefits from measures are
directly perceived by transport users. It is
calculated in Euro per inhabitant actualised to
present year
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Economic evaluation - EIM software

• ETOB Transport Operator Benefits
• The indicator is a measure of the Transport
  operator benefits, represented by the increase of
  revenues from transport.
• Revenues are toll in case of toll motorway, fares
  for public transport and rail services, parking
  fees and again tolls in case of road pricing
  measures.
• The net benefits for transport operators, split
  by mode of transport, are discounted to present
  year.

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Economic evaluation - EIM software
ETGB Government Benefits from Transport The
indicator measures the balance of the Government
as a consequence of the selected measures /
policy. It includes the taxes collected and the
expenditure for public transport services. It
is calculated in Euro/inhabitant.
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Economic evaluation - EIM software
ETAC Transport External Accident Costs This
indicator represents the variation of external
costs of accidents. It is calculated, by mode of
transport, on the basis of the average accident
risk and the average external costs, as computed
in each city / country. The indicator value is
measured in Euro / inhabitant.
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Economic evaluation - EIM software
ETEC Transport External Emissions Costs The
indicator measures the shadow costs of air
pollution. The externalitites concern the impact
on human health, the impacts on materials and
buildings, the agricultural crop losses and the
forest damages. The Impact is differentiated by
zone type according to the resident population
density. The total monetary cost is quantified
in Euro per year. The indicator is then measured
in Euro / inhabitant.
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Economic evaluation - EIM software
ETGG Transport External Greenhouse Gases The
indicator measures the shadow costs of climate
change, the external costs of emissions of
greenhouse gases caused by the combustion of
petrol, gas and diesel in vehicle engines. The
total monetary cost is quantified in Euro per
year. The indicator values are measured in Euro /
inhabitant.
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Economic evaluation - EIM software
ETNC Transport External Noise Costs The
indicator measures the shadow costs of noise. The
economic value of noise is calculated as
willingness to pay for the reduction of noise
emissions. The total economic cost of noise is
estimated by attributing a monetary value to the
damage of the single person exposed to noise by
defining some nuisance thresholds. The indicator
is measured in Euro / inhabitant at present year.
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Further indicators - EIM software
TGC Transport Generalised Costs variation The
indicator provides the average Generalised Costs
of transport as perceived by transport users of
Socio Economic Groups. A comparison between
values in the RS and in the policy provides a
measure of the benefits attributable to each
SEG. It is used to assess the Justice of
Distribution of Economic Benefits indicator in
the Social Index.
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Further indicators - EIM software

• SOPG Productivity Gain from Land Use
• Its the measure of the impact of policies on
  the economic efficiency of the city, measured on
  the basis of the potential dimension of the
  labour market.
• The change of the size of the area of employment
  opportunities is a measure of the productivity
  gains or losses. The indicator is part of the
  Social Sustainability Index.