From a recent article in the Guardian: ‘Some estimates of the costs and benefits of the HS2 highspeed
rail line are “mumbo jumbo” calculated by men with slide rules, a former Conservative deputy
prime minister has said.
‘Lord Heseltine said the £40bn project should be supported because it was “really imaginative”
rather than fixating on its notional value for money.’
Yet economists do traditionally focus on value for money. Read (and refer to) some of the official
sources on the costs & benefits of HS2, then outline the cost-benefit approach used by economists
to assess projects such as HS2. Make sure to refer to the techniques (and graphs) from the first
semester of the course. You are welcome to take a position for or against HS2 (or no position at all),
but the focus of your essay should be on the economic techniques used to make the decision, and
the controversies that have arisen from these techniques.
References:
– Mason, Rowena & Watt, Nicholas (2013, November 12). HS2 cost-benefit estimates are mumbo jumbo, says Heseltine. The Guardian.
– Nash, C. (2010). Current debates on the cost-benefit analysis of transport proyects in Great Britain. Cuadernos económicos de ICE, (80),
63-80.
– https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/253486/strategic-case.pdf
– Pindyck & Rubinfeld, Microeconomis, Chapter 9 (and others)
Above i have given the question to answer and the references they have used to write the question. Please use a variety of sources and please cite them using Harvard referencing. Please apply the required economic theory to the essay question.
If possible you can use this book as a guide for theory : Pindyck & Rubinfeld, Microeconomis, (chapters 1-9, 17 and 18) only.