Interdependency and Cost-benefit Analysis

The National Road Authority of Norway is currently performing cost-benefit analyses of candidate projects for the next Road Plan. The Institute of Transport Economics have been asked to provide guidelines on how to treat interdependency among projects in these calculations. This note discusses the problem of interdependency and provides immediate guidelines on how to tackle the problem in the calculations now going on. Parts of the material are later to be included in the final report of a broader research project, «Social efficiency analyses of infrastructure investments in the transport sector».