Bus Rapid Transit versus road expansion to alleviate congestion: A general equilibrium comparison

Bus Rapid Transit (BRT) and highway expansions actually proposed for Beirut are compared using an urban computable general equilibrium model. The model has two geographic zones, central area and suburbs, but it is economically detailed. It includes production, labor, residential and commercial real estate markets and multimodal road congestion with private car, minibus and taxi vehicles and public buses. BRT reduces road congestion by 9 %, improves traffic speed by 24 %, and reduces the road congestion externality by 18 %. The BRT improves consumer utility and achieves social welfare gains that are 7.9 % of income: two-thirds are from the BRT as a new mode and one-third from the benefits of the lower congestion for the other modes. Road expansion also improves consumer utility, but achieves lower social welfare due to its cost and lower effect on real estate prices. The BRT yields an operating surplus, but road expansion requires deficit financing.