The Logsum as an Evaluation Measure

Review of Literature and New Results

Published in: Transportation Research Part A, Vol. 41, No. 9, Nov. 2007, p. 874-889

Posted on RAND.org on November 01, 2007

by Gerard de Jong, Andrew Daly, Marits Pieters, Toon van der Hoorn

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The logsum is a measure of consumer surplus in the context of logit choice models. In spite of the very frequent use of logit models in transport, project assessment is only rarely done using logsums. Instead in project evaluation or appraisal, changes in transport costs and time (borrowing values of time from some source) are commonly used to get the traveller benefits. The paper contains a review of the theoretical and applied literature on the use of logsums as a measure of consumer surplus change in project appraisal and evaluation. It then goes on to describe a case study with the Dutch National Model System for transport in which the logsum method and the commonly used value of time method are compared for a specific project (high speed trains that would connect the four main cities in the Randstad: Amsterdam, The Hague, Rotterdam and Utrecht).

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