NUMERATOR-DENOMINATOR ISSUE IN THE CALCULATION OF BENEFIT- COST RATIOS /WITH DISCUSSION & CLOSURE/

THE APPLICATION OF THE BENEFIT-COST RATIO METHOD TO THE EVALUATION OF ALTERNATIVE HIGHWAY DESIGNS AND PROGRAMS IS OF SUBSTANTIAL INTEREST. SEVERAL IMPORTANT REFERENCE WORKS IN THIS AREA POINT OUT THAT THE MAGNITUDE OF THE RATIO WILL BE AFFECTED BY THE CATEGORY TO WHICH A SPECIFIC CONSEQUENCE IS ASSIGNED, THAT IS, WHETHER AN ECONOMIC GAIN WILL BE CONSIDERED AS A BENEFIT (ADDED TO THE NUMERATOR) OR AS A NEGATIVE COST (SUBTRACTED FROM THE DENOMINATOR). THE WRITERS OF THESE REFERENCES PROCEED TO JUSTIFY THE SPECIFIC CLASSIFICATION OF CERTAIN CONSEQUENCES SUCH AS ROADWAY MAINTENANCE COSTS AND USER COSTS. HOWEVER, INASMUCH AS THE ONLY RELEVANT ISSUE IS WHETHER THE RATIO EXCEEDS UNITY, THE NUMERATOR-VERSUS-DENOMINATOR ISSUE IS WITHOUT INTEREST. A RATIO CANNOT BE ALTERED FROM GREATER THAN UNITY TO LESS THAN UNITY MERELY BY ADDING (OR SUBTRACTING) A CONSTANT FROM BOTH NUMERATOR AND DENOMINATOR. /AUTHOR/

Media Info

  • Media Type: Print
  • Features: References; Tables;
  • Pagination: pp 27-31
  • Monograph Title: Transportation costs
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00202084
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Aug 7 1972 12:00AM