When to invest in high speed rail

•Presents the latest evidence on the costs and benefits of high speed rail and how to measure them.•Brings together worldwide experience on the circumstances in which the benefits may exceed the costs.•Discusses British experience of appraising high speed rail and the controversies that surround it.

This paper starts by a general review of the costs and benefits of high speed rail, of how they are measured in cost–benefit analysis and of the circumstances in which benefits may be expected to exceed costs. Two approaches are taken to the latter; first, examining models in which values of key parameters are varied to see in what circumstances benefits exceed costs, and secondly looking at the limited evidence from ex post studies, mainly for France and Spain. We then turn to British experience of the appraisal of HS2 – the proposed line linking London to Birmingham, Manchester and Leeds. It is concluded that the main factors determining economic success for high speed rail projects are construction costs, value of time saving per passenger and traffic volume and degree of congestion of existing transport networks. The biggest uncertainty regarding the case for high speed rail surrounds the possibility of wider economic benefits.