Project NPV, Positive Externalities, Social Cost-Benefit Analysis-The Kansas City Light Rail Project

Authors

Sudhakar Raju, Rockhurst UniversityFollow

Abstract

The Heartland Light Rail project represents Kansas City’s biggest infrastructural investment in decades. The ballot initiative for the light rail project was voted down three times until it was finally approved in November 2006. Using best estimates of construction costs, operating expenses and federal funding, I estimate the net present value (NPV) of the project to be negative $343 million. From a standard NPV perspective the Kansas City light rail transit (LRT) system is unlikely to break even. However, if the negative externalities of auto travel and the positive externalities associated with light rail are properly accounted for in a comprehensive social costbenefit framework, investment in the Kansas City LRT system becomes an increasingly feasible option.

DOI

http://doi.org/10.5038/2375-0901.11.4.4

Recommended Citation

Raju, Sudhakar. 2008. Project NPV, Positive Externalities, Social Cost-Benefit Analysis-The Kansas City Light Rail Project. Journal of Public Transportation, 11 (4): 59-88.
DOI: http://doi.org/10.5038/2375-0901.11.4.4
Available at: https://digitalcommons.usf.edu/jpt/vol11/iss4/4