Sensitivity Analysis: Transit
Chapter 10 examines the sensitivity of projected transit investment requirements to variations in the values of the following exogenously determined model inputs: passenger miles traveled (PMT), capital costs, the value of time, and user cost elasticities.
Sensitivity to Changes in Passenger Miles Traveled
The Transit Economic Requirements Model (TERM) relies on forecasts of PMT in large urbanized areas to determine the amount of investment that will be needed by the Nation's transit systems to maintain performance (i.e., current levels of passenger travel speeds and vehicle utilization rates) as ridership increases, and to improve these performance indicators.
PMT forecasts are generally made by metropolitan planning organizations (MPOs) in conjunction with projections of vehicle miles traveled (VMT). The average annual growth rate in PMT of 1.5 percent used in this report is a weighted average of the most recent MPO forecasts available from 76 of the Nation's largest metropolitan areas. Investment requirements in the 2002 report were based on a projected PMT growth rate of 1.6 percent, based on projections from 33 MPOs. (PMT increased at an average annual rate of 2.7 percent between 1993 and 2002, and by 0.9 percent between 2000 and 2002.)
Varying the assumed rate of growth in PMT affects estimated transit investment requirements. A 50 percent increase/decrease in growth will increase/decrease the cost to maintain conditions and performance by 18 to 19 percent and the cost to improve conditions and performance by 12 to 13 percent. Investment requirements decrease significantly if PMT remains constant.
Sensitivity to a 25 Percent Increase in Capital Costs
Given the uncertainty of capital costs, a sensitivity analysis was performed to examine the effect of higher capital costs on the cost of projected transit investment requirements. A 25 percent increase in capital costs increases the amount necessary to maintain conditions and performance by 14 percent and increases the amount necessary to improve conditions and performance by 9 percent.
Sensitivity to Changes in the Value of Time
The value of time is used to determine the total benefits accruing to transit users from transit investments that reduce passenger travel time. Variations in the value of time were found to have a limited effect on investment requirements, since changes in the value of time have inverse effects on the demand for transit services.
Sensitivity to Changes in the User Cost Elasticities
TERM uses user cost elasticities to estimate the changes in ridership that will result from changes in fare and travel time costs, resulting from infrastructure investment to increase speeds, decrease vehicle occupancy levels and increase frequency. A doubling or halving of these elasticities has almost no effect on projected investment requirements.