In this simplistic example, this is intuitively obvious. But in a
real example, these effects are effectively impossible to see
through, especially for a third-party observer. An appraisal might
even show negative benefits
, if the timetable is further from
the optimal in the investment scenario than in the do-nothing
scenario. For example, this happens if one assumes 4 trains/h
without the investment and anything above 8 trains/hour with
the investment. We are aware of such phenomena happening in
practice, confusing the analysts involved.
What timetable principle is appropriate depends on the institutional context. Of the institutional setting is such that, say, a
public agency strives to maximize social welfare, then the welfare-
maximizing frequencies should be applied when evaluating the
investment (4 trains/h in the do-nothing scenario and 6 trains/
hour in the investment scenario). If the institutional setting is such
that an operator is free to maximize its profits, the number of
trains that optimize the producer surplus should be applied in the
appraisal. Appraisals D and E happen to be close to each other and
to Appraisal A, but this need not be the case.