Reunatuotto

Reunatuotto is a theoretical metric used in urban economics and regional planning to quantify the incremental return gained by extending a public service, infrastructure, or policy to the outer edges of an urban region. The term blends Finnish roots, with reuna meaning edge or boundary and tuotto meaning yield or return.

Definition and scope: Reunatuotto measures the marginal benefit of expanding a service to the urban fringe per unit of investment, typically expressed as a monetary value or welfare indicator and adjusted for time and externalities. It is designed to complement traditional cost-benefit analysis by emphasizing edge-area effects rather than centralized city impacts alone.

Measurement and application: Calculating reunatuotto involves estimating benefits to new users, spillovers to neighboring areas, changes in property values, accessibility and health outcomes, and the costs of extending infrastructure. The resulting ratio helps compare alternative extension scenarios, such as transit lines, broadband coverage, or green space programs, to determine where investments may produce the highest marginal gains.

Origins and status: The concept appears in some Nordic urban studies and speculative planning discussions as a way to systematize edge-area considerations. It is not universally standardized, and different studies may define benefits and costs differently, leading to variations in the resulting estimates.

Limitations and criticism: Reunatuotto is data-intensive and model-dependent; results can be sensitive to assumptions about demand, spillovers, time horizons, and discount rates. Critics caution against overemphasizing edge gains without accounting for overall city goals and equity considerations.

See also: marginal utility, marginal cost, edge effect, urban economics, cost-benefit analysis.