Institute of Transportation, MOTC

　　For decades, when conducting cost-benefit analysis on transportation investment projects, the government tends to consider only the construction cost, operating cost and measurable benefits such as travel time, cost savings, and the reduction of traffic accidents. Only few projects try to include benefits on improvement of air and noise pollution control. Most of the other externalities are regarded as non-quantitative costs (benefits) and thus ignored. This would result in the distortion of resource allocation and biased policy decisions. In fact, among the ignored externalities spatial separation caused by transportation facilities is very important. The relief of spatial separation is often the motive for investing in an urban transportation project. Failure to consider the relief of spatial separation will result in the distortion of the cost-benefit analysis and project contents. Thus, this study aims to measure the monetary value of the improvement on spatial separation caused by transportation facilities. Using the light rail project in Kaohsiung as an example, we did an economic benefit analysis which includes a more complete list of externalities. These externalities include traffic accidents, air pollution, noise pollution, and spatial separation caused by transportation facilities. The WTP price for air pollution, noise pollution and spatial separation are estimated using actual data of Kaohsiung through the hedonic price method. Traffic accident costs are estimated using outcomes of past studies. The conclusions of the present study are as follows:

1. Spatial separation caused by transportation facilities is about 8%~24%, having a great influence on housing prices.
2. The key factors that inhabitants of Kaohsiung consider in purchasing their houses are “near downtown” and “transportation convenience”. However, if the traffic noise exceeds 67dB, it would begin to have negative impact on housing prices.
3. The elasticity of housing price with respect to TSP, PM10 and CO are estimated as 0.455, 0.345 and 0.132, respectively, all have notable negative influences on housing prices.
4. Results of cost-benefit analysis indicated that benefits estimated from the improvement of air pollution control, noise pollution control, traffic accident, and spatial separation constitute about 41.2%~42.6% of the total benefit of the light rail project, which is a high percentage and should not be ignored.