STATE RAILROAD BRANCHLINE INVESTMENTS AND COMMUNITY EMPLOYMENT: PROBLEMS IN BENEFIT-COST ANALYSIS

State departments of transportation have developed elaborate benefit-cost techniques to evaluate how railroad rehabilitation projects affect employment in on-line communities. As this study shows, however, differences in methodological approach and inconsistencies in the way states measure benefits greatly affect the types of projects they select--serving as a vivid illustration of the widening gap between the theory and practice of benefit-cost analysis. To rectify these problems, the study calls for enhanced coordination between states in the planning process, with additional consideration of the regional "spillover" effects of railroad projects.