Safety Evaluation of Cable Median Barriers in Combination With Rumble Strips on Divided Roads

CHAPTER 8. ECONOMIC ANALYSIS

Because it was clear that cable median barriers resulted in an increase in total crashes and a reduction in injury and fatal crashes—thereby implying an increase in PDO crashes—the research team found it necessary to estimate the change in PDO crashes in order to conduct an economic analysis. The team undertook the following steps for the economic analysis:

1. The research team estimated the change in PDO crashes using the EB predicted crashes in the after period and the actual crashes in the after period for total and KABC crashes.
   
   
2. Using the number of mile-years in the after period, the research team determined the change in PDO crashes per mile-year and the change in KABC crashes per mile-year. Based on combined data from Illinois and Kentucky, KABC crashes decreased by 0.53 per mi-year, and PDO crashes increased 2.38 per mi-yr. In Missouri, KABC crashes decreased by 0.18/year, and PDO crashes increased by 0.72/mi-yr. The research team discussed the use of KAB crashes per-mile, but used KABC because it was based on a large sample of crashes.
   
   
3. The research team used the comprehensive cost estimate for PDO and KABC crashes shown in appendix D (which updated figures from an earlier report by Council et al.) to estimate the annual crash savings in economic terms.⁽¹⁸⁾ The team assumed the cost of a KABC crash was $498,579, and the cost of a PDO crash was $18,877. Using these numbers, the benefit per mile per year was $217,725 in Illinois and Kentucky and $77,917 in Missouri. Appendix D refers to a June 2013 U.S. Department of Transportation (USDOT) memo that prescribes sensitivity analysis based on low and high values of crash costs.⁽¹⁹⁾ Specifically, the USDOT memo suggests that sensitivity analysis should be done by estimating B/C ratios for 0.57 and 1.41 times the 2014 crash costs.⁽¹⁹⁾ Step 5 provides the results based on the sensitivity analysis.
   
   
4. The research team estimated the annualized cost of the treatment, as shown in Figure 10.

Where:

C = Treatment cost.
R = Discount rate (as a decimal) and assumed to be 0.07.
N = Expected service life (years).

The annualized treatment cost per mile was $26,286 in Illinois and Kentucky and $18,810 in Missouri.

• Step 5. The research team calculated the B/C ratio as the ratio of the annual crash savings to the annualized treatment cost. The resulting B/C ratio for Illinois and Kentucky was 8.28, while the Missouri ratio was 4.14. Based on the sensitivity analysis, the B/C ratio for Illinois and Kentucky could range from 4.72 to 11.68, and the B/C ratio for Missouri could range from 2.36 to 5.84.