Transportation: Impact on Economy, Project 2008-05, Volume I and Volume II

This report estimates both the one-time and the on-going economic and fiscal benefits from transportation investments. The report provides the new Jersey Department of Transportation (NJDOT) with two general software programs to enable both types of benefits to be estimated for specific highway transportation projects. These programs can assist NJDOT in its planning and economic analysis. The report uses past NJDOT highway transportation projects to identify the myriad inputs used in highway projects and the expenditures made on these inputs for 40 project types and locations (e.g., bridge replacement, road widening, intersection improvements, etc. in North and South New Jersey). Using the R/ECON™ Input-Output Model, estimates of the one-time benefits of each project type/location are made and a general-use software program is developed. This Transportation Investment Impact Estimator is applied to NJDOT’s Ten-Year Capital Plan. The analysis indicates that over 95,000 job-years, an additional $7.9 billion in gross domestic product, and an additional $6 billion in compensation (income) will be generated in New Jersey from the estimated $10.7 billion in investment expenditures of the Ten-Year Capital Plan. In addition, a similar analysis is conducted for the $832 million in state and local highway projects that will receive the first-round of support from the American Recovery and Reinvestment Act. These projects will generate over eight thousand job-years, $627 million in additional gross domestic product, and $480 million in additional income for New Jersey. The report proceeds to analyze the reductions in recurring costs (due to congestion, traffic accidents, environmental damages, vehicle operation, and maintenance) that result from improvements in transportation capacity. The North Jersey Regional Transportation Model is used together with cost functions (CUBE) developed specifically for New Jersey. Cost-benefit analysis is conducted for five past highway projects that increased transportation capacity. The analysis indicates that each of the projects was economically efficient; i.e., the present value of the future stream of economic benefits (reduced costs) generated by the project exceeds (by significant margins) the present value of the investment costs of the project. A software program is developed that allows NJDOT to conduct such cost-benefit analyses for any past, current, or future projects that increase transportation capacity in north New Jersey.


  • English

Media Info

  • Media Type: Web
  • Edition: Final Report
  • Features: Appendices; Figures; References; Tables;
  • Pagination: 205p

Subject/Index Terms

Filing Info

  • Accession Number: 01149205
  • Record Type: Publication
  • Report/Paper Numbers: FHWA-NJ-2009-015
  • Created Date: Jan 27 2010 3:17PM