Impact Methodologies

Cost-Benefit

Case Studies

Method 1. Benefit-Cost Analysis Models

Benefit-cost models calculate user benefits and external costs for alternative transportation networks or projects and compare them with capital, operating, and maintenance costs. User benefits, including time, operating costs, and safety costs, are based on differences in travel patterns and transportation network characteristics. Some models also include valuations for externalities such as emissions, energy, and noise.

The Surface Transportation Efficiency Model, STEAM, is a model developed by FHWA to estimate user benefits, costs, and externalities of transportation projects, based on trip tables and networks from four-step travel demand models. STEAM calculates user benefits based on changes in consumer surplus for travelers at the link level. STEAM also estimates and monetizes externalities including emissions, energy consumption, and noise based either on default or user-input values. The use of STEAM to analyze regional freight improvements is described in the Portland case study. STEAM has also been applied in New Jersey to estimate user benefits of Route 1 corridor improvements, and in the New York metropolitan area to analyze regional freight strategies.
The ITS Deployment and Analysis System (IDAS) is a sketch-planning network model to analyze the travel impacts, user benefits, infrastructure costs, and other social benefits and costs of over 60 intelligent transportation system (ITS) strategies. IDAS utilizes local travel model network and trip table data and allows the user to apply ITS strategies at the network, link, or zone level. IDAS has been applied in a number of metropolitan areas including Cincinnati, Detroit, Miami, and Tucson.
Net_BC is a benefit-cost model that computes benefit-cost measures based on travel demand model assignments. Benefits include time savings, operating cost savings, and accident reductions. Net_BC has been applied in Indiana and other areas.
StratBENCOST is a benefit-cost model that computes benefit-cost measures based on user-input traffic characteristics, project costs, and growth factors. Impacts considered include time, operating, and safety cost savings; construction, operation, and maintenance costs; and emissions and social/neighborhood benefits. StratBENCOST was developed for the National Cooperative Highway Research Program (NCHRP).

Method 2. Life-Cycle Investment Models

These models are designed to compare alternative highway investment strategies by comparing user benefits with life-cycle capital, operating, and maintenance costs under different strategies. The models are commonly used to assess tradeoffs between system expansion and system preservation, as well as to evaluate the benefits of different overall levels of investment.

The Highway Economic Requirements System (HERS) is a benefit-cost analysis system developed by the Federal Highway Administration. It is used to compare improvements to highway segments including resurfacing, reconstruction, widening, etc. While it has primarily been applied at a national level, the states of Oregon and Indiana have adopted it to analyze statewide investment strategies. These features have been adopted into a new state-level version of the software known as HERS/ST.
The Highway Development and Management Tools (HDM-4) model was developed by the World Bank. It estimates road user benefits, infrastructure costs, and externalities including accidents, energy, and emissions for alternative investment strategies. It can be applied at either the project or program level. Previous versions of the model have commonly been used internationally to evaluate tradeoffs between highway expansion and preservation.

Method 3. Other Cost-Benefit Analysis Methods

Other methods have been applied based in principles similar to those underlying the models in Method 1. However, these rely on some level of user programming of functions rather than coming as pre-packaged software.

A study was conducted in Seattle using a combination of the Puget Sound Regional Council's travel model and the STEP model to compare the social benefits and costs of highways, transit, and pricing at the regional level. The study included a sensitivity analysis of different assumptions, including assumptions regarding commercial vehicle travel (ECONorthwest, 1996).
Contingent valuation (CV) is an economic method to estimate changes in total user benefits from shifts in travel demand and network characteristics. CV is a way of measuring "consumer surplus," as is done in the STEAM model. The Sacramento case study illustrates how CV can be calculated directly from travel model output, and how it can be used to compare alternatives based on the per-trip equivalent cost savings for the average user.

Least-cost planning is an approach toward determining transportation alternatives that minimize total social costs. It includes the application of benefit-cost techniques, in conjunction with the consideration of demand reduction and supply expansion projects on equal footing. The least-cost planning approach is described in ECONorthwest and Parsons Brinckerhoff (1995). An application of least-cost planning to the Seattle area is documented in Nelson and Shakow (1996).

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