Study on the Application of CVM in the Social Benefits Valuation of Urban Mass Transit

Abstract

The total social benefits of urban mass transit consist of determined and undetermined benefits. Traditional methods of market valuation can be used to assess the determined benefits, including savings in parking costs, energy conservation etc. However, the undetermined benefits, such as increased economic productivity as a result of improved mobility, are difficult to be estimated by using the traditional methods. The Contingent Valuation Method (CVM) represents a more encompassing alternative that can capture both determined and undetermined benefits. CVM is applied to valuate the social benefits of Shanghai's urban mass transit. The valuation result shows that the social benefits brought by urban mass transit system in the city of Shanghai are about 70.774-99.461 billion RMB per year. Meanwhile, the result is tested with the econometrics method. This study indicates that CVM can overcome the shortcomings of the traditional market valuation method. Furthermore, CVM provides a scientific way to evaluate the total social benefits of urban mass transit.