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Systems 2017, 5(2), 29; doi:10.3390/systems5020029

Application of System Dynamics to Evaluate the Social and Economic Benefits of Infrastructure Projects

Entrepreneurship, Commercialisation and Innovation Centre (ECIC), The University of Adelaide, South Australia, SA 5005, Australia
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Received: 20 December 2016 / Revised: 22 March 2017 / Accepted: 24 March 2017 / Published: 29 March 2017
(This article belongs to the Special Issue Systems Approaches and Tools for Managing Complexity)
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Abstract

Cost-Benefit Analysis (CBA) is often employed to inform decision makers about the desirability of transport infrastructure investment options. One of the main limitations of traditional CBA approaches is that they do not provide a dynamic view that explicitly illustrates the cost and benefit relationships between component entities over time. This paper addresses this issue by describing a System Dynamics (SD) approach that can perform transport infrastructure CBA through the application of systems thinking to develop a causal-loop model that can subsequently be operationalised into an executable stock-and-flow model. Execution of this model readily enables sensitivity analysis of infrastructure investment options and visualisation of the cost-benefit behaviour of each variant over time. The utility of the approach is illustrated through a case study, the Co Chien Bridge project in Vietnam, using a model that incorporates conventional economic metrics and factors that measure indirect project benefits, such as impact on gross domestic product, unemployment rate, and total taxes gained from affected economic sectors. View Full-Text
Keywords: Cost-Benefit Analysis; Transport Infrastructure Project; System Dynamics; Social and Economic Factors Cost-Benefit Analysis; Transport Infrastructure Project; System Dynamics; Social and Economic Factors
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Nguyen, T.; Cook, S.; Ireland, V. Application of System Dynamics to Evaluate the Social and Economic Benefits of Infrastructure Projects. Systems 2017, 5, 29.

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