On the treatment of foreigners and foreign-owned firms in the cost-benefit analysis of transport projects

Abstract

This paper addresses the issue of the treatment of foreigners and foreign-owned firms in the cost-benefit analysis of transport projects. The distinction between the indirect utility function of national and non-national allows the consideration of some relevant cases. These are: the common case of zero weights to foreign consumers, and foreign companies shipping their producer surpluses abroad; the case of local firms owned by foreigners; the altruist local household case; the consequence of fixed factors (for example, land) for the evaluation of foreign surpluses in infrastructure investment; and the case of transnational projects with asymmetrical distribution of costs and benefits.