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Conditions and Performance Report

Conditions and Performance Report
Chapter 10—Sensitivity Analysis

Conditions and Performance Chapter Listing

Conditions and Performance Home Page


Introduction


Highway Sensitivity Analysis

Transit Sensitivity Analysis

 

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Highway Sensitivity Analysis
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The accuracy of the investment requirements reported in Chapter 7 depends on the validity of the underlying assumptions used to develop the analysis. This section explores the effects that varying several key assumptions in the highway investment requirement analytical process would have on the Cost to Maintain Highways and Bridges and the Cost to Improve Highways and Bridges. While not discussed directly in this chapter, any changes in the projected investment requirements would also affect the "gaps" identified in Chapter 8 between projected spending and the investment requirement scenarios.

Alternative Travel Growth Assumptions

Q   Does the accuracy of the investment requirements projected by HERS depend on how accurately the travel forecasts in HPMS predict what future VMT growth will be?
A  Not exactly. The HERS model assumes the travel forecasts in HPMS accurately predict what future VMT growth would be, if highway-user costs remained constant, rather than what future growth will be. This is a critical distinction.

The accuracy of the investment requirements depends on the accuracy of the travel forecasts in HPMS as modified by the travel demand elasticity features in HERS. At current funding levels, HERS predicts that highway-user costs will increase over time, so VMT will grow more slowly than the HPMS baseline forecasts, particularly in large urban areas. This concept is discussed in more detail in Appendix G.

The States provide forecasts of future VMT for each individual HPMS sample highway section. As indicated in Chapter 7, the HERS model assumes that the forecast for each sample highway segment represents the level of travel that will occur if a constant level of service is maintained on the facility. This implies that VMT will only occur at this level if pavement and capacity improvements made on the segment over the 20-year analysis period are sufficient to maintain highway-user costs at 1997 levels. If HERS predicts that highway-user costs will deviate from baseline 1997 levels on a given highway segment, the model's travel demand elasticity features will modify the baseline VMT growth projections from HPMS.

The HERS model utilizes VMT growth projections to predict future conditions and performance of individual highway segments and to calculate future investment requirements. If the HPMS VMT forecasts as modified by the HERS travel demand elasticity features are overstated, the investment requirement projections may be too high. If the travel growth is underestimated, the investment requirement projections may be too low.

The effective VMT growth rates predicted by the HERS model could be off target if either the HPMS forecasts don't accurately predict the travel that will occur if a constant level of service is maintained, or if the travel demand elasticity procedures in HERS don't accurately predict the response that highway users will have to changes in costs. This section explores the impacts of modifying the HPMS forecasts. This is the equivalent of assuming that the HPMS forecasts don't actually predict the VMT that would occur at a constant level of service.

Increasing VMT Growth Projections

As indicated in Chapter 9, the State-supplied VMT growth projections in HPMS for 1997 to 2017 average 2.16 percent per year, well below the 2.84 average annual VMT growth rate observed from 1977 to 1997. The HERS model assumes that the 2.16 percent composite VMT growth projection in HPMS represents the growth that will occur at a constant level of service. If this forecast understates future growth, the investment requirements will be higher than predicted.

Exhibit 10-1 shows the impact on investment requirements of assuming that the VMT growth that would occur at a constant level of services will be 2.84 percent annually (matching the actual growth rate over the last 20 years), rather than the 2.16 percent rate derived from the HPMS forecasts. This is achieved by factoring up the growth rates entered into the HERS model for each section by 31.5 percent. Modifying the travel growth projections in this fashion would increase the Cost to Maintain Highway and Bridges by 15.5 percent. Increased VMT would increase the rate of pavement deterioration, as well as increase the share of resources that HERS would recommend using for capacity expansion. Both these factors would tend to increase the investment required to maintain condition at 1997 levels. The Cost to Improve Highways and Bridges would increase by 14.1 percent based on this change in assumptions. The increased travel would increase the number of pavement and capacity projects that HERS would find to be cost-beneficial.

Exhibit 10-1. Impact of Alternate VMT Growth Assumptions on Investment Requirements

Reducing VMT Growth Projections in Large Urbanized Areas

Exhibit 10-1 also shows the effects of reducing the initial travel growth projections for all HPMS sections in areas over 1 million in population by 10 percent, 20 percent, 50 percent, and 100 percent. As indicated in Chapter 9, the average annual VMT growth rate for HPMS sections in large urbanized areas is 1.86 percent. If this value actually represents the travel growth that would occur at a rising level of service, factoring down the VMT growth rates could reduce them to the level that would occur at a constant level of service, which HERS needs to properly perform its travel demand elasticity adjustments.

Factoring down the initial travel projections for all HPMS sections in large urbanized areas by 10 percent would reduce the average annual VMT growth projection from 1.86 percent to 1.68 percent. This would reduce the Cost to Maintain Highways and Bridges by 1.6 percent, and reduce the Cost to Improve Highways and Bridges by 1.1 percent. A 20 percent reduction would change the average annual VMT growth projection in large urbanized areas to 1.49 percent, and would reduce the Cost to Maintain Highways and Bridges and the Cost to Improve Highways and Bridges by 2.4 percent and 2.0 percent respectively. If it is assumed that no travel growth will occur in large urbanized areas at all, unless user costs decline, then the Cost to Maintain Highways and Bridges would be 11.0 percent lower and the Cost to Improve Highways and Bridges would be 8.3 percent lower. (Note that investment in large urbanized areas only would be much more heavily affected than overall investment in all areas, and would decline 37.9 percent and 29.2 percent respectively.)

Q   Why does reducing VMT growth rates in urbanized areas over 1 million in population have a smaller impact on investment requirements than raising the VMT growth rates for all highway sections?
A   Of the total investment requirements for the Cost to Maintain Highways and Bridges and the Cost to Improve Highways and Bridges, only 28.5 percent and 29.1 percent respectively are for highway improvements in urbanized areas over 1 million. Therefore, over 70 percent of the baseline investment requirements would not be affected by a reduction in VMT growth rates that applies only to highway sections in large urbanized areas.

If reductions in highway travel growth coincided with increases in transit PMT growth, this would increase overall transit investment requirements, offsetting to some extent the lowered highway investment requirements. The effects of changing transit travel growth assumptions are discussed later in this chapter.

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Page last modified on November 7, 2014
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