MAXIMIZING, MEASURING, AND NOT DOUBLE COUNTING TRANSPORTATION-IMPROVEMENT BENEFITS - A PRIMER ON CLOSED-ECONOMY AND OPEN-ECONOMY COST-BENEFIT-ANALYSIS

In a ''closed-economy'' cost-benefit analysis of a public investment, all affected economic agents matter. In such an analysis, if price equ als marginal cost in all affected markets, accurately measuring benefi ts requires looking only at the use made of the improvement; ''non-use r'' costs and benefits cancel out. Only if price is unequal to margina l cost in affected markets do unduplicated net nonuser benefits and co sts exist. In an ''open-economy'' cost-benefit analysis, gains and los ses to outsiders are ignored. The nature of nonuser insider benefits, particularly from ''job-creation,'' is discussed.