Model estimates of the pay-off of the Betuwe railway have played an important role for politicians to decide to build this railway. This has already been discussed extensively, especially with respect to the macro-economic effects of this investment. A deeper analysis shows that these effects are very difficult to assess. The NIJFER institute for example calculated a long term profit of 52.1 biljon Dutch guilders, but our analysis of this model shows that the profit lays with 50 reliability between 15 and 30 biljon Dutch guilders. Our conclusion is that this political investment decision is not sufficiently supported by the expected macro-economic pay-off. A prudent use of quantitative research requires that the involved uncertainties in the model outcomes is properly taken into account.

cross-country analysis, infrastructure, investment, policy design, regression
hdl.handle.net/1765/1379
Econometric Institute Research Papers
Erasmus School of Economics

Heij, C, van Regenmortel, M, Steehouwer, H, Voeten, V, & de Wijs, S. (1996). Onzekerheid over de baten van de Betuwelijn (No. EI 9613-/A). Econometric Institute Research Papers. Retrieved from http://hdl.handle.net/1765/1379