Estimation of Willingness to Pay by Trans-Korean Railway Connection Using CVM

Abstract

Recent construction of Trans-Korean Railway result in travel time reduction and also production and employment increase during construction phase. Those direct benefits are estimable using existing development methodology. But indirect benefits such as community development and economy, social culture are hard to be quantified. Therefore, this study estimated the economic benefits in terms of regional economy, development, and socio-cultural aspects of the operation of Trans-Korean Railway by using CVM (Contingent Valuation Method). It surveyed 545 adults over 20 years old, and estimated willingness to pay on usage of Trans-Korean Railway. As a result, respondents were willing to pay 13,824 won per household in residence tax. Moreover, total annual economic benefit regional economic and social culture due to Trans-Korean Railway is estimated to be 291.9 billion won.