Benefit Cost Analysis of Highway Investment Projects Using Regional Transportation Planning Models

The purpose of this paper is to present the analysis of the on-going, recurring benefits of investments due to improvements of transportation infrastructure. Identifying the benefits of roadway expansion projects is difficult due to the complexity of highway transportation networks. Even though most capacity expansion projects are local, their influence often spreads out beyond the area of implementation. Traffic responds to road changes, by shifting from other areas to the improved parts of the network. Thus, quantification of the likely changes in terms of associated benefits and costs is crucial for policy makers and planners to determine the net benefit of these projects. The main objectives of this paper are (1) to analytically examine the key components of highway transportation costs using region specific cost functions, and subsequently to empirically estimate these variables using pertinent data from the Northern New Jersey highway network, and (2) to illustrate the importance of network effects of highway capital investment projects, and how benefit cost ratio varies with the geographical scope considered for benefit cost analysis. Three completed highway expansion projects in New Jersey are selected as case studies. North Jersey Regional Transportation Model - Enhanced is used to estimate the benefit cost ratio of the selected projects. The change in benefit cost ratio of each project is illustrated at varying geographical scale. It is shown that while benefit cost analyses conducted only at corridor level do not yield desirable benefit cost ratios, wider geographical benefits of these project can justify these capital investment projects. These results indicate that benefit cost analysis of capital investment projects should be based on the comprehensive network wide effects rather than localized effects.

• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Bartin, Bekir
  • Ozbay, Kaan
  • Jahan, Nusrat
• Conference:
  • Transportation Research Board 90th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2011-1-23 to 2011-1-27
• Date: 2011

Language

• English

Media Info

• Media Type: DVD
• Features: Figures; Maps; References; Tables;
• Pagination: 18p
• Monograph Title: TRB 90th Annual Meeting Compendium of Papers DVD

Subject/Index Terms

• TRT Terms: Benefit cost analysis; Capital investments; Highways; Infrastructure; Policy making; Regional planning; Regional transportation
• Uncontrolled Terms: Cost functions; Expansion projects; Highway expansion
• Geographic Terms: New Jersey
• Subject Areas: Economics; Highways; I10: Economics and Administration;

Filing Info

• Accession Number: 01337647
• Record Type: Publication
• Report/Paper Numbers: 11-3415
• Files: TRIS, TRB
• Created Date: Apr 25 2011 7:04AM