COBA Model

Created by: TessAni
Created on: 20-01-13 12:51


	COBA Model
	Advantages Total benefit is split into value of time savings, accident cost savings and vehicle operating cost Costs are split into two: capital costs which are incurred in the early phase of any major road project and include construction costs, land purchase and so on; and maintenance costs - the annual costs to cover the costs of lighting, cleaning and routine resurfacing work + emergency services They also take into account the benefits for the individual users as well as the costs - over a long period of time They are also viewed in comparison with other potential road building schemes before decisions are made Well understood and has been the standard within government for the past 30 years	Disadvantages The COBA model is very difficult to comprehend, which limits the ability of the public to participate fully when there are public inquiries into new road schemes COBA does not recognise all of the benefits and costs involved. It is basically a user-based method of appraisal. It does not, for example, seek to put a monetary value on the external costs and benefits involved, nor does it do so for the indirect costs and benefits of a new road scheme The environmental effects a new road project are not adequately addressed. This is largely because of the problem of placing a monetary value on such items. Concerns that value judgements have to be made to estimate the total benefits of a road project. These particularly relate to the value of time, which is usually the largest benefit in most cost-benefit calculations the COBA model only applies to roads. What is really needed is a model that applies to all forms of transport. This would provide a level playing field.
	Evaluation It was for all these disadvantages that a 'new approach to appraisal' has been put in place by the Department for Transport, however, the COBA model remains essential.

COBA Model

Advantages

Total benefit is split into value of time savings, accident cost savings and vehicle operating cost
Costs are split into two: capital costs which are incurred in the early phase of any major road project and include construction costs, land purchase and so on; and maintenance costs - the annual costs to cover the costs of lighting, cleaning and routine resurfacing work + emergency services
They also take into account the benefits for the individual users as well as the costs - over a long period of time
They are also viewed in comparison with other potential road building schemes before decisions are made
Well understood and has been the standard within government for the past 30 years

Disadvantages

The COBA model is very difficult to comprehend, which limits the ability of the public to participate fully when there are public inquiries into new road schemes
COBA does not recognise all of the benefits and costs involved. It is basically a user-based method of appraisal. It does not, for example, seek to put a monetary value on the external costs and benefits involved, nor does it do so for the indirect costs and benefits of a new road scheme
The environmental effects a new road project are not adequately addressed. This is largely because of the problem of placing a monetary value on such items.
Concerns that value judgements have to be made to estimate the total benefits of a road project. These particularly relate to the value of time, which is usually the largest benefit in most cost-benefit calculations
the COBA model only applies to roads. What is really needed is a model that applies to all forms of transport. This would provide a level playing field.

Evaluation

It was for all these disadvantages that a 'new approach to appraisal' has been put in place by the Department for Transport, however, the COBA model remains essential.

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COBA Model

COBA Model

Advantages

Disadvantages

Evaluation

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