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Kost e n - ba t e n a n a lyse bij in t e gr a le ge bie dsv e r k e n n in ge n
Sum m ary
The m et hod used in t he decision- m aking process for t ransport infrast ruct ure t o
syst em at ically ident ify social im pact s ( a social cost - benefit analysis as described in
t he guidance docum ent on infrast ruct ure effect s ‘Overzicht Effect en I nfrast ruct uur’ –
OEI ) is in principle also suit able for use in int egrat ed area developm ent
assessm ent s. However, t here are a num ber of m et hodological and pract ical issues
t hat require at t ent ion. This st udy shows t hat t he aspect s specific t o int egrat ed area
developm ent assessm ent s can be adequat ely covered by t he st andard m et hods,
ascert ains t he point s t hat require furt her at t ent ion and ident ifies t he init iat ives t hat
have already been t aken in t his area.
I nt egrat ed ar ea developm ent assessm ent s evaluat e com plem ent ary invest m ent s in
housing, em ploym ent , accessibilit y, wat er and nat ure conservat ion. I nt egrat ed
assessm ent s differ in t hree respect s from t he st andard assessm ent s of t ransport
infrast ruct ure proj ect s. First , t he efficiency gains or synergy advant ages arising from
coordinat ing or bundling invest m ent s are a m aj or considerat ion. A second im port ant
charact erist ic is t hat t hey involve plans from various sect ors and disciplines. This
m eans t hat a w ide range of different t ypes of effect s can be expect ed, including
t hose t hat are difficult t o m easure and evaluat e ( called ‘weak values’) . Third, m any
part ies are involved, from bot h governm ent and t he privat e sect or, t hat all seek t o
ensure t heir goals and int erest s are given full considerat ion in t he evaluat ion.
Cent ral governm ent is seeking t o im prove t he coordinat ion and com plem ent arit y of
invest m ent s in new developm ent and m obilit y. To t his end t he various invest m ent
budget s have been com bined in t he Mult i- annual Program m e for I nfrast ruct ure,
Spat ial Developm ent and Transport ( MI RT) . Most ar ea developm ent proj ect s, such
as t hose financed from t he Nat ional Spat ial St rat egy budget , are at t he dist rict or
neighbourhood scale, whereas t he int egrat ed area developm ent assessm ent s arising
from t he regional agendas for t he MI RT decision- m aking process are on a larger
scale. These are assessm ent s of plans for developm ent s on a regional scale, such as
t he Rij k- Regioprogram m a Am st erdam - Alm ere- Markerm eer, Rot t erdam Vooruit and
t he I nt egrale Benadering Holland Rij nm ond.
The Net herlands I nst it ut e for Transport Policy Analysis ( KiM) has inv est igat ed
whet her t he m et hod of cost - benefit analysis current ly used for infrast ruct ure
proj ect s is also suit able for int egrat ed area developm ent assessm ent s w it hin t he
MI RT decision- m aking process and whet her addit ional guidance m ay be needed.
Sy n e r gy ca n be cle a r ly r e ve a le d
Cost - benefit analysis is a good way of ident ifying t he advant ages of t he
sim ult aneous im plem ent at ion or coordinat ion of different proj ect s, w hich are oft en
referred t o as synergy. These synergy benefit s can be revealed by breaking down a
( com bined) proj ect int o subproj ect s and t hen ident ifying and com paring t he cost s
and benefit s of each of t hese subproj ect s. Com paring t he sum of t he social ret urns
of t he separat e proj ect s wit h t he social ret urns of t he com bined proj ect gives an
im pression of t he nat ure and degr ee of synergy. Synergy benefit s ( or cost s) are
t herefore reflect ed in t he cost - benefit balance of t he com bined proj ect , but t hey do
not form a separat e it em in a cost - benefit analysis.
Kost e n - ba t e n a n a lyse bij in t e gr a le ge bie dsv e r k e n n in ge n
Con side r coor din a t ion be n e fit s e a r ly in t h e pr oce ss
Under t he slogan ‘Quicker and Bet t er’ t he rules for m aking decisions on invest m ent s
in t he Mult i- annual Program m e for I nfrast ruct ure, Spat ial Developm ent and
Transport have been alt ered. A num erical cost - benefit analysis is carried out at a
single point in t he assessm ent st age. That is t he m om ent when decision- m akers
m ust choose bet ween t hree proj ect alt ernat ives, leading t o what is known as t he
preferred decision ( ‘sieve m om ent 2’) . To obt ain an overall im pression of t he
coordinat ion benefit s it is also useful t o review t he cost s and benefit s of t he proj ect s
at an earlier st age t o obt ain a pict ure of all t he effect s, but using a sim pler
calculat ion. I n general, t his can help wit h finding opt ions for im proving proj ect s and
alt ernat ives t hat deliver bet t er ret urns. Specifically for area developm ent
assessm ent s, it can also provide insight s int o t he global coordinat ion or synergy
benefit s at an early st age in t he process. I f it becom es appar ent earlier in t he
process t hat no synergy advant ages can be expect ed, t his m ay be a reason t o
decide against an int egrat ed cost - benefit analysis and t o t ake a sim pler, m ore
sect oral appr oach inst ead. The absence of synergy advant ages, or even t he
occurrence of negat ive synergy, indicat es t hat t he coordinat ion advant ages do not
lie wit h t he com bined im plem ent at ion of t he plans, but elsewhere.
N u m e r ou s e ffe ct s n ot a pr oble m ; de t e r m in a t ion of e ffe ct s n ot e qu a lly
a dva n ce d
A feat ure of int egrat ed ar ea developm ent assessm ent s is t hat t hey bring t oget her
proj ect s from different sect ors. This m eans t hat different disciplines are involved
and t here ar e oft en m any different t ypes of effect s and im pact s on t he environm ent .
Cost - benefit analy sis is em inent ly suit able for dealing w it h a wide range of effect s,
because it m akes effect s com parable by bringing t hem t oget her under a single
heading ( as far as possible) and it present s effect s in a consist ent m anner. The
m et hods for det erm ining and valuing effect s are m ore advanced in som e sect ors
t han in ot hers. Using cost - benefit analysis in sect ors w here it is not yet frequent ly
used will in t hese sect ors lead t o a dem and for m ore research int o t he det er m inat ion
and valuat ion of effect s. I n t im e t his will reduce t he differences bet ween sect or s and
disciplines in t he developm ent of t hese t echniques.
La n d de ve lopm e n t ca lcu la t ion s: com pa t ibilit y w it h cost - be n e fit a n a lysis
n e e ds a ddr e ssin g
I nt egrat ed ar ea developm ent assessm ent s alm ost always involve spat ial effect s.
Est im at es of t he effect s of spat ial developm ent s usually st art wit h t he profit abilit y
assessm ent of t he land developer. I t is easy t o ext ract figures from t hese analyses
because t hey are always available. However, t he procedures and account ing
m et hods in land developm ent are such t hat t hey cannot be used direct ly t o obt ain a
correct reflect ion of all t he spat ial effect s from a social perspect ive. The Minist ry of
I nfrast ruct ure and t he Environm ent is t herefore cur rent ly st udying how land
developm ent account s can be adapt ed t o m ake t hem suit able for use in social cost -
benefit analyses. The out com e will deliver concret e proposals for im proving t he
m et hod. The availabilit y of easily applicable spat ial equilibrium m odels w ould
provide an alt ernat iv e t o using figures from land dev elopm ent calculat ions, but
m uch st ill needs t o be learned in t hat area as w ell.
When using figures from land developm ent account s it should be borne in m ind t hat
area developm ent proj ect s are oft en m ore likely t o be am ended t han, for exam ple,
Kost e n - ba t e n a n a lyse bij in t e gr a le ge bie dsv e r k e n n in ge n
t ransport infrast ruct ure pr oj ect s. Area developm ent proj ect s are oft en affect ed by
changes in t he real est at e m arket and changes dev elopers m ake t o t heir plans in
response. Making an assessm ent by m eans of a num erical cost - benefit analysis at a
single point in t im e is risky, because t he m arket m ay change at a lat er dat e. For t his
reason, int egrat ed assessm ent s, because of t heir spat ial com ponent , ent ail a great er
risk of falling back t o an earlier st age of decision- m aking t han proj ect s t hat involve
only t ransport infrast ruct ure. Carrying out a sensit ivit y analysis as part of t he cost -
benefit analysis of int egrat ed area developm ent assessm ent s can lengt hen t he ‘shelf
life’ of t his aspect of t he decision- support inform at ion.
Pr e se n t in g e ffe ct s in t h e ir ow n u n it s
I nt egrat ed ar ea developm ent assessm ent s oft en involve effect s on t he environm ent .
These include, for exam ple, environm ent al and landscape im pact s and effect s on t he
visual appeal and im age of an area. These effect s ar e not reflect ed in a m arket for
financial t ransact ions or are j ust one of t he m ult it ude of effect s t hat det erm ine t he
price. This m akes it difficult t o derive a m onet ary valuat ion of t hese im pact s. The
fact t hat t hese sort s of im pact s frequent ly play a role in area developm ent
assessm ent s m akes it m ore difficult t o draw up a com plet e invent ory of cost s and
benefit s in purely m onet ary t erm s.
The above m ent ioned ‘weak values’ are cert ainly no longer a ‘blind spot ’ in our
knowledge as num erous st udies have been carried out and resear ch in t his area
cont inues. However, t hese st udies do not all point in t he sam e direct ion. One st rand
goes as far as possible in expressing effect s in m onet ary t erm s, oft en based on t he
idea t hat t hese effect s can t hen at least be account ed for in t he financial balance of
cost s and benefit s. How ever, t his balance is oft en given undue weight . Ot hers
believ e t hat t hese v aluat ion m et hods are st ill inadequat e or t hink t hat expressing
t hese effect s in m onet ary t erm s obscur es t heir nat ure and t heir real im pact . For t he
cost - benefit analy sis it is m ore urgent t hat t his issue is resolv ed t han t hat t he
available volum e of research out put on t his t opic is expanded furt her.
I n line wit h t he OEI guidance docum ent on infrast ruct ure effect s, it is desirable not
only t o present a balance of cost s and benefit s, but also t o provide an overview of
t he effect s in t heir own ‘unit s’ ( for exam ple, t he num ber of affect ed resident s, t he
area of im pact ed landscape, et c.) . This would allow governm ent officials and
polit icians, t he people w ho event ually t ake t he final decision, t o form an im pression
of t he act ual nat ure and scale of t he effect s.
I f t he correct ness of a m et hod for expressing an effect in m onet ary t erm s rem ains
disput ed, it m ay help t o m ake assum pt ions or supposit ions about t he valuat ion of
effect s, define t he m argins wit hin which t hese values are expect ed t o lie and t o
assess t he sensit ivit y of t he out com es w it h regard t o t he assum pt ions m ade. I f no
suit able m et hod is available for expressing an effect in m onet ary t erm s, t hat effect
is t hen m ent ioned in t he balance of t he cost - benefit analysis as an unquant ifiable
it em . I n such cases it m ay som et im es be possible t o indicat e whet her t his is a
( highly) posit ive or ( highly) negat ive effect . I t is im port ant t hat t he people using t he
decision- support inform at ion are aware t hat t here are relevant it em s t hat cannot be
properly expr essed in m onet ary t erm s; t he unquant ifiable it em s in t he cost - benefit
analy sis are t herefore not negligible residual it em s. This is t rue for every cost -
benefit analysis, but part icularly for cost - benefit analyses for area developm ent
assessm ent s.
Kost e n - ba t e n a n a lyse bij in t e gr a le ge bie dsv e r k e n n in ge n

M or e a n d be t t e r com m u n ica t ion e n h a n ce s t h e cla r it y of cost - be n e fit
a n a lysis ou t com e s
Anot her specific feat ure of int egrat ed area developm ent assessm ent s is t hat t hey
involve several st akeholders wit h varied backgrounds. Transcending adm inist rat ive
boundaries m eans t he involvem ent of various governm ent aut horit ies, each w it h it s
own int erest s, and t hat t hose involved will each have different levels of knowledge
and experience of using cost - benefit analyses. Bringing t hese st akeholders t oget her
in a session t o explore t he possible effect s of t he plan at t he beginning of t he
planning and decision- m aking process will creat e a broader base of shared insight s
int o t he effect s of t he plan and how t hese t ranslat e int o welfare changes relevant t o
t he cost - benefit analysis.
I n addit ion t o t he effect s expect ed by t he st akeholders t hat can be ident ified one-
on- one in t he cost - benefit analysis, som e effect s can rem ain ‘hidden’ in t he
calculat ions. This m ay occur in t hree w ays:
1.
Effect s are hidden in a redist ribut ion effect . Exam ple: Region A becom es m ore accessible and at t ract s m ore businesses. However, t his is at t he expense of r egion B, which loses businesses. At t he nat ional level t here is no net effect , but at t he level of region A, t hough, t here is clearly a change. Because different st akeholders are involved in area developm ent assessm ent s, it is relevant t o ensure t hat t he cost - benefit analysis also reveals t he spat ial redist ribut ion effect s. The OEI guidance docum ent used for infrast ruct ure proj ect s shows t hat t his is possible, but it is oft en not done in pract ice. I t is even m ore urgent t hat t his occurs in int egrat ed area developm ent assessm ent s. Effect s are hidden in a non- specified aspect of a wider effect . Exam ple: Em issions of PM10 are included, but not separat ely specified, under t he cat egory ‘Em issions’. The safet y of cyclist s is incorporat ed wit hin t he it em ‘Reduct ion in num ber of deat hs and inj uries’. The involvem ent in area developm ent assessm ent s of st akeholders wit h lim it ed knowledge and experience wit h cost - benefit analyses requires m ore explanat ion of how such effect s are recorded. The effect has t o be ‘t ranslat ed’ int o a cost - benefit t erm . Exam ple: A local aut horit y expect s a proj ect t o lead t o ‘im proved com pet it iveness for t he business com m unit y’. These im provem ent s can ( largely) be t raced t o ‘gains in t ravel t im e and t ravel t im e reliabilit y’, for which t here is an explicit it em in t he cost - benefit analysis. This, t oo, requires furt her explanat ion. Finally, local st akeholders m ay consider cert ain effect s t hat do not appear in t he cost - benefit analysis t o be im port ant . These are effect s t hat fall out side t he scope of t he cost - benefit analysis because t hey do not have any econom ic welfare effect s. For exam ple, a local aut horit y m ay consider t hat a m easure should ‘cont ribut e t o a balanced populat ion com posit ion', whereas it is not clear t hat t his obj ect ive will cont ribut e t o great er prosperit y. The out com e of t he cost - benefit analysis can be m ade m ore accessible and com prehensible t o t he various ( regional) decision- m akers and polit icians by also providing a descript ion of t he degree t o which proj ect s cont ribut e t o m eet ing policy obj ect ives. Kost e n - ba t e n a n a lyse bij in t e gr a le ge bie dsv e r k e n n in ge n
Qu ick e r a n d Be t t e r , a lso for in t e gr a t e d a r e a de ve lopm e n t a sse ssm e nt s
Bringing st akeholders t oget her in a session at t he beginning of t he planning and
decision- m aking process in order t o explore all t he possible effect s of t he plan
m ight slow down t he decision- m aking process. I n t he int erest s of a ‘Quicker and
Bet t er’ process, t his would appear at first sight t o be unfavourable. How ever, t his
invest m ent in t im e can reap dividends lat er in t he process by generat ing broader
support and delivering a ‘Bet t er’ proj ect .

Source: http://www.kimnet.nl/sites/kimnet.nl/files/summary-cost-benefit-analysis-for-integrated-area-development-assessments.pdf