ECONOMIC ANALYSIS - THE FUNDAMENTAL APPROACH TO DECISIONS IN HIGHWAY PLANNING AND DESIGN

HIGHWAY ENGINEERS ARE CHARGED WITH THE RESPONSIBILITY FOR MAKING THE BEST POSSIBLE USE OF A LIMITED RESOURCE - THE PUBLIC FUNDS AVAILABLE FOR HIGHWAY PURPOSES. DECISIONS REGARDING THIS "BEST USE" ARE MADE AT ALL LEVELS OF A HIGHWAY ORGANIZATION, FROM THE DRAINAGE ENGINEER CHOOSING AMONG CULVERT SIZES AND TYPES TO THE ADMINISTRATOR DECIDING WHICH PROJECT AMONG MANY SHOULD BE GIVEN PRIORITY. MANY DECISIONS IN HIGHWAY ECONOMY APPARENTLY ARE MADE BY HUNCH OR INTUITION, WITHOUT ANY ATTEMPT WHATSOEVER TO APPLY FORMAL CRITERIA FOR DECISION-MAKING. IN OTHER INSTANCES, DECISIONS REST ON RULES OR PROCEDURES THAT ARE NOT MONEY-BASED. EVEN WHERE ECONOMY STUDIES ARE MADE, THE FINDINGS SELDOM MEET THE CRITERIA FOR THE BEST USE OF LIMITED FUNDS. IN THIS PAPER, ALTERNATIVE TECHNIQUES FOR HIGHWAY ECONOMY STUDIES ARE COMPARED. ARGUMENTS ARE GIVEN FAVORING THE "RATE OF RETURN" METHOD, WHICH IS WIDELY USED IN PRIVATE INDUSTRY. DIFFERENCES BETWEEN HIGHWAY ALTERNATIVES CAN BE RENDERED COMMENSURABLE ONLY BY EXPRESSING THEM IN COMMON UNITS, THE ONLY VALID COMMON UNIT BEING MONEY. AT PRESENT, INSUFFICIENT DATA ARE AVAILABLE ON MANY ELEMENTS OF HIGHWAY COST AND BENEFIT. TODAY'S HIGHWAY ENGINEER, THEREFORE, MAY BE PARTIALLY JUSTIFIED IN RESORTING TO "HUNCH" DECISIONS INSTEAD OF MAKING AN ECONOMY STUDY THAT HE CONSIDERS TO BE BASED ON QUESTIONABLE MONETARY FIGURES. RESEARCH CERTAINLY IS NEEDED IN MANY AREAS IF ECONOMY STUDIES ARE TO HAVE REAL VALIDITY. THE PAPER OUTLINES SOME IMPORTANT FIELDS FOR THIS RESEARCH AND STATES SOME PRINCIPLES TO BE RECOGNIZED IN ITS PLANNING. /AUTHOR/

  • Supplemental Notes:
    • Vol 37, pp 45-57, 2 TAB, 24 REF
  • Authors:
    • Oglesby, C H
    • Grant, E L
  • Discussers:
    • Barnett, J
  • Publication Date: 1958

Media Info

  • Monograph Title: Proceedings of the Thirty-Seventh Annual Meeting of the Highway Research Board, Washington, D.C., January 6-10, 1958
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00200228
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Jan 26 1970 12:00AM