ABSTRACT
The need for special techniques for the appraisal of public sector decisions on the allocation of investment resources or between alternative policies has already been referred to. The basic concepts which economists have used to try to overcome the lack of a satisfactory financial criterion, consumer surplus, externalities and shadow prices, will be explained in this and the following chapter. The concepts themselves are of general application. The need in transport, as in other areas of applied economics, is to reinterpret them in terms suitable for the particular context within which they are to be applied. This chapter begins with a brief survey of some basic points about the transport sector, to provide the background against which our analytic framework can be developed.
