THE INVESTMENT ANALYSIS APPROACH TO ESTIMATING HIGHWAY NEEDS

THE "INVESTMENT ANALYSIS APPROACH" CAN BE USED WHERE THE ROAD-LIFE STUDY IS UP TO DATE. IT IS BASED UPON THE PREMISE THAT UNDER A CONDITION OF SUSTAINED TRAFFIC INCREASE OVER A PERIOD OF YEARS THERE SHOULD BE A CORRESPONDING INCREASE IN THE INVESTMENT IN THE HIGHWAY PLANT. DEPRECIATED INVESTMENT IS INVOLVED IN THE INVESTMENT ANALYSIS APPROACH BECAUSE THIS TREND SHOULD CORRESPOND TO THE TRAFFIC TREND. ONCE THE TREND IN DEPRECIATED INVESTMENT CATCHES UP TO THE TRAVEL TREND, IT IS ASSUMED THAT ADEQUACY WILL BE SUSTAINED THEREAFTER; THE INVESTMENT TREND THEN BECOMES IDENTICAL TO THE TRAVEL TREND. A PROCESS KNOWN AS "REVERSE COMPUTATION" IS EXPLAINED AND ILLUSTRATED. ASSUMPTIONS WERE MADE AS TO THE INVESTMENT LIVES OF RECENT AND FUTURE CONSTRUCTION OF VARIOUS ROADWAY ELEMENTS. COMPUTATION IS MADE OF THE CONSTRUCTION AMOUNTS NECESSARY TO RAISE THE LEVEL OF INVESTMENT UP TO THE TRAVEL TREND. COMPARISON IS MADE WITH THE "ENGINEERING APPROACH", THE USUAL MEANS OF ESTIMATING COSTS TO IMPROVE ROAD SYSTEMS. A GENERAL FINDING WAS THAT OVER A 30-YEAR PERIOD, THE TOTAL CAPITAL OUTLAY NEEDED TO BUILD AN ADEQUATE HIGHWAY SYSTEM AND THEREFORE KEEP IT ADEQUATE WAS ABOUT THE SAME REGARDLESS OF THE TIME TAKEN FOR THE INITIAL CATCH-UP PROGRAM. UNDER THE INVESTMENT ANALYSIS APPROACH A REVISED ESTIMATE CAN BE PREPARED QUICKLY.

  • Supplemental Notes:
    • Vol 35, pp 9-13, 4 FIG, 1 REF
  • Authors:
    • Farrell, F B
  • Publication Date: 1956

Media Info

  • Monograph Title: Proceedings of the Thirty-Fifth Annual Meeting of the Highway Research Board, Washington, D.C., January 17-20, 1956
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00200469
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Aug 8 1971 12:00AM