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Publication Number:  FHWA-HRT-15-065    Date:  September 2015
Publication Number: FHWA-HRT-15-065
Date: September 2015


Safety Evaluation of Wet-Reflective Pavement Markings


Chapter 7. Economic Analysis

An economic analysis was conducted to determine the estimated B/C ratio for this strategy for multilane roads and for freeways. (For two-lane roads, an economic analysis could not be performed because the crash reductions were too small and were statistically insignificant.) The statistically significant reduction in total crashes for Wisconsin was used as the benefit in the analysis of multilane roads. For freeways, the results for all States combined were used to derive the benefit in the analysis. Specifically, because the reduction in total crashes was not statistically significant, the reduction for the targeted wet-road crashes was used as the benefit.

On the cost side, for the installations on multilane roads in Wisconsin, the analysis conservatively assumed, in the absence of details of each installation, that the grooved contrast 4-inch tape, costing $9,200/mi for a single lane line treatment, was used for all installations. In total, 259.76 lane mi were installed at an estimated cost of $2,389,792. For freeways, the same per mile treatment cost was assumed for Wisconsin. For the North Carolina installations, NCDOT indicated that the polyurea treatment costing $1.10 per linear ft was applied. For Minnesota, the analysis conservatively assumed that the ground-in markings cost $17,000/mi. With these assumptions, the total estimated cost for freeway installations in the three States was $6,765,373.

The analysis assumed the useful service life for safety benefits was 2 years. This was based on information from MnDOT, which found that the retroreflectivity lasted 2 years under wet conditions and 4 years under dry conditions. Service lives reported by NCDOT and WisDOT indicated longer periods, so a 2-year life was assumed as the conservative option.

Based on information from the Office of Management and Budget Circular A-4, a real discount rate of 7 percent was used to calculate the annual cost of the treatment based on the 2-year service life.(8) With this information, the installation costs convert to annual costs of $3,741,928 for freeways in the three States and $1,321,794 for multilane roads in Wisconsin.

For the benefit calculations, the most recent FHWA mean comprehensive crash costs disaggregated by crash severity, location type, and speed limit were used as a base to derive comprehensive 2014 unit crash costs of $147,181 for freeways and $139,316 for multilane roads.*(9) Council et al. developed these costs based on 2001 crash costs and found that the unit costs (in 2001dollars) for property damage only (PDO) and fatal plus injury crashes for speed limits posted greater or equal to 50 mi/h (assumed for freeways) from that report were $7,800 and $206,015, respectively. For all speed limits combined (assumed for multilane roads) the costs were $7,428 and $158,177, respectively. These were updated to 2014 dollars by applying the ratio of the USDOT 2014 value of a statistical life of $9.2 million to the 2001 value of $3.8 million.(1) Applying this ratio of 2.42 to the unit costs for PDO and fatal plus injury crashes, and then weighting by the frequencies of these two crash types in the after period (2,944 and 1,075 for freeways from table 14 and 307 and 153 for multilane roads from table 10), aggregate 2014 unit costs for total crashes were obtained as shown in figure 10 and figure 11.

* Revised 3/12/2019

Figure 10. Equation. Freeway calculation. 2.42 times open parenthesis 7,800 times 2,944 divided by open parenthesis 2,944 plus 1,075 close parenthesis plus 206,015 times 1,075 divided by open parenthesis 2,944 plus 1,075 closed parenthesis closed parenthesis is equal to $147,167

Figure 10. Equation. Freeway calculation.

Figure 11. Equation. Multilane calculation. 2.42 times open parenthesis 7,428 times 307 divided by open parenthesis 307 plus 153 closed parenthesis plus 158,177 times 153 divided by open parenthesis 307 plus 153 closed parenthesis closed parenthesis is equal to $139,316 .

Figure 11. Equation. Multilane calculation.

Fatal crashes were not considered on their own because of the very low numbers of such crashes in the data, which would skew the results.

The crash reduction was calculated by subtracting the actual crashes in the after period from the expected crashes in the after period had the treatment not been implemented. The number of crashes saved per year was 36.87 wet-road crashes for freeways and 51.59 total crashes for multilane roads, which were obtained by dividing the crash reductions (122.49 and 96.77, respectively) by the average number of after period years per site (3.32 and 1.88, respectively).

The annual benefits (i.e., crash savings) of $5,426,563 and $7,187,312 for freeways and multilane roads, respectively, were the product of the crash reductions per year (36.87 and 51.59) and the aggregate costs of a crash, with all severities combined ($147,181 and $139,316). The B/C ratio was calculated as the ratio of the annual benefit to the annual cost. The B/C ratios were estimated to be 1.45 for freeways and 5.44 for multilane roads. The USDOT recommends that sensitivity analysis be conducted by assuming values of a statistical life 0.57 and 1.41 times the recommended 2014 value.(1) These factors can be applied directly to the estimated B/C ratios to obtain a range of 0.83 to 2.04 for freeways and 3.10 to 7.67 for multilane roads. These results, which are summarized in table 15, suggest that the treatment—even with conservative assumptions on cost, service life, and the value of a statistical life—can be cost effective, especially for multilane roads.

Table 15. Economic analysis results.

Type of Road B/C Ratio
Point Estimate Lower Bound Upper Bound
Freeways 1.45 0.83 2.04
Multilane Roads 5.44 3.10 7.67



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