About 20 AEF members and associates recently attended a very interesting seminar with the New Economics Foundation (NEF).
NEF explained how they evaluated the economic benefit of a third runway at Heathrow in their report ‘Grounded: a new approach to evaluating Runway 3’.
A key feature of the NEF study was a new approach to estimating costs/benefits called ‘Social Return On Investment’ (SROI). This takes account of social costs and benefits of projects that are usually ignored when doing economic appraisals.
The other key feature was re-run of the government’s model to take account of the recesssion. It turns an economic benefit into a loss.
Although the third runway has been scrapped by the new government, the study is still highly relevant because the methodology and NEF’s reversal of the government’s benefit are highly relevant for other airports..