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Conditions and Performance

Status of the Nation's Highways, Bridges, and Transit:
2002 Conditions and Performance Report

Executive Summary
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Executive Summary
Part I: Description of Current System
Ch1: The Role of Highways and Transit
Ch2: System and Use Characteristics
Ch3: System Conditions
Ch4: Operational Performance
Ch5: Safety Performance
Ch6: Finance

Part II: Investment Performance Analyses
Ch7: Capital Investment Requirements
Ch8: Comparison of Spending and Investment Requirements
Ch9: Impacts of Investment
Ch10: Sensitivity Analysis

Part III: Bridges
Ch11: Federal Bridge Program Status of the Nation's Bridges

Part IV: Special Topics
Ch12: National Security
Ch13: Highway Transportation in Society
Ch14: The Importance of Public Transportation
Ch15: Macroeconomic Benefits of Highway Investment
Ch16: Pricing
Ch17: Transportation Asset Management
Ch18: Travel Model Improvement Program
Ch19: Air Quality
Ch20: Federal Safety Initiatives
Ch21: Operations Strategies
Ch22: Freight

Part V: Supplemental Analyses of System Components
Ch23: Interstate System
Ch24: National Highway System
Ch25: NHS Freight Connectors
Ch26: Highway-Rail Grade Crossings
Ch27: Transit Systems on Federal Lands

Appendix A: Changes in Highway Investment Requirements Methodology
Appendix B: Bridge Investment/Performance Methodology
Appendix C: Transit Investment Condition and Investment Requirements Methodology
List of Contacts

Ch 15: Macroeconomic Benefits of Highway Investment

The economic benefits of transportation infrastructure investment have traditionally been measured at the level of individual projects. In recent years, however, there has been growing interest in measuring the overall contribution to the economy made by many separate investments in highways and other transportation infrastructure.

Traditional microeconomic benefit-cost analysis tools such as HERS focus on reductions in costs of travel time, vehicle operations, maintenance, and crashes. Macroeconomic measures of highway investment benefits for the production sector capture the total savings in firms' production and distribution costs that result directly from an increased supply of highway capital. They may also capture indirect improvements in the productivity of labor and other capital.

These micro- and macroeconomic measures of transportation investment benefits may each include benefits not captured by the other approach, and thus have their own strengths and weaknesses. For example, macroeconomic measures reflect market outcomes at the regional or national level, while microeconomic approaches may include valuations of benefits that do not result from market activity. However, macroeconomic measures may also capture benefits such as logistic cost savings and increased competition through market area expansion that are not reflected in microeconomic models.

FHWA has been a major sponsor of recent research on macroeconomic approaches to measuring highway investment benefits. These studies have found that the economic returns on highway capital investment were very high in the 1960s, but had declined to the average rate of return on private capital by the 1980s.

Ch 16: Pricing

Some of the congestion problems facing America's road network can be traced to imbalances between highway travel demand and supply, due to the "underpricing" of highway use. Road pricing can be a key long-term strategy for managing the Nation's transportation system more effectively and enhancing economic efficiency by improving the allocation of costs among users. FHWA's Value Pricing Pilot Program and its predecessor-the Congestion Pricing Pilot Program-have funded pilot projects to demonstrate the potential of this strategy.

Some types of road pricing projects that have been implemented in the U.S. over the past few years include variable tolls on existing toll facilities, variable tolls on added highway lanes, and the conversion of high-occupancy vehicle (HOV) lanes to high-occupancy/ toll (HOT) lanes. A key feature of such projects is that the prices charged to highway users vary by the time of day, reflecting the greater costs that motorists impose on the highway system during congested periods. These projects have been found to be effective in encouraging shifts in driver behavior (such as moving trips to off-peak hours) and making more efficient use of highway capacity. They also provide an option for premium service for users who may be particularly pressed for time due to business or personal commitments.

Other pricing concepts have been proposed and may be implemented in the future. These include fast and intertwined regular (FAIR) lanes, mileage-based pricing, and parking cash-out.

A recent study examining the effects of different value pricing policies on a hypothetical congested freeway found that the net benefits of such policies might greatly exceed their costs of implementation.

Page last modified on November 7, 2014.
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