RANKING OF REGIONAL ROAD INVESTMENT IN NORWAY - DOES SOCIOECONOMIC ANALYSIS MATTER

This paper explores the priorities for road investments in Norway, wit h particular emphasis on the use of benefit-cost calculus. The author tests whether the observed rankings of the Ranking Road Agencies are e xplained and/or influenced positively by the benefit-cost ratio. Secon d, based on a questionnaire survey, the tradeoff made by Regional Road Authorities between an economic welfare maximizing strategy and the o bserved strategy in analysed. Benefit-cost ratio is found to be a sign ificant explanatory variable in only four out of fifteen regions. In o nly one region does benefit cost ratio explain more than 30 percent of the observed variation. The trade-off analysis demonstrates that rank ing by benefit-cost ratio if adopted gives formidable return as compar ed to the observed rankings. The reasons given by the Regional Road Ag encies for not ranking investment projects according to benefit cost r atio is that several important impacts are not valued monetarily and t herefore are not included in the benefit-cost-ratio. The results of th e questionnaire survey give reasons to doubt the Regional Road Agencie s understanding of the welfare maximizing principles of benefit cost c alculus. Concluding remarks on the observed behaviour of the Regional Road Agencies are also offered.