Economic Criteria of Introducing a New Transit Station

Abstract

Developments of new land use concentrations or shifts in the spatial location of existing land uses along the rail require that the train service will be adjusted accordingly. A typical response to the new demand is to consider the implementation of an additional station on an existing train line. In most cases, the new station will improve the accessibility for adjacent users. However, passengers that board in other stations, and are already on the train, suffer time losses due to the stop at the new station. Hence, a positive attitude towards the new station is not obvious. This paper introduces an economic criteria whether to add a new station or not. A cost-benefit model is presented, which considers infrastructure costs for the new station, and benefits for new passengers in terms of time savings. Time loss of on-board passengers is also considered, in the ‘cost’ side of the equation. Analyses of other components, that influence the feasibility of the train station, are also included. The cost-benefit analysis is applied on a test case of a new potential station in the northern region of Israel. The findings suggest a break-even formula through which losses of on-board passengers are compared with benefits to the users of the new station.

Keywords: Train, Value of Time, Utility Function, Envelope Curve, Transit, Transportation

JEL Classification: H54, R40, R41, R42