ECONOMIC ANALYSIS OF HIGHWAY DESIGN IN DEVELOPING COUNTRIES

LABOR, CAPITAL, AND ENERGY ARE THE CONTRIBUTIVE PRODUCTIVE FACTORS TO BE INCORPORATED IN THE SELECTION OF ROAD TRANSPORT TECHNOLOGY FOR DEVELOPING COUNTRIES. THE WHOLE RANGE OF TECHNOLOGY AVAILABLE FOR PRODUCING TRANSPORTATION MUST BE CONSIDERED IN DESIGNING TRANSPORTATION FACILITIES FOR UNDERDEVELOPED COUNTRIES. A FRAMEWORK FOR ANALYZING THE CHOICE OF TECHNOLOGY POSSIBLE IN PRODUCING A GIVEN OUTPUT OF TRANSPORTATION IS FORMULATED. THE ECONOMICAL CONCEPT OF THE PRODUCTION FUNCTION IS USED TO DETERMINE THE DEGREE TO WHICH EXPENDITURES FOR LABOR MAY BE SUBSTITUTED FOR CAPITAL EXPENDITURES IN PRODUCING A GIVEN OUTPUT OF ROAD TRANSPORTATION. THIS FRAMEWORK IS THEN USED TO DETERMINE THE OPTIMAL COMBINATION OF PRODUCTIVE FACTORS, THAT IS, THE BEST ROAD DESIGN OR CHOICE OF TECHNOLOGY FOR A GIVEN SET OF CONDITIONS. THIS MEANS FINDING THE BEST TRADE-OFF AMONG CAPITAL COSTS, ROAD-USER COSTS, AND ROAD MAINTENANCE COSTS UNDER VARYING CONDITIONS OF UNEMPLOYMENT, INTEREST RATES, AND FOREIGN EXCHANGE RATES. A CASE STUDY BASED ON THE AUTHORS RESEARCH IN VENEZUELA IS PRESENTED TO ILLUSTRATE THE DATA REQUIREMENTS FOR THE SUGGESTED METHOD OF ANALYSIS. THE EXAMPLE ILLUSTRATES THE USEFULNESS OF RELATIVELY SCANT COST INFORMATION IN MAKING RATIONAL ECONOMIC DECISIONS. USING REGRESSION TECHNIQUES, ESTIMATING EQUATIONS ARE DERIVED WHICH RELATE THE COST OF ROAD CONSTRUCTION TO DESIGN STAND- ARDS FOR TWO TYPES OF TERRAIN CONDITIONS. ROAD USER COST DATA AND MAINTENANCE COST DATA BASED ON LIMITED STATISTICAL INFORMATION ARE ALSO PRESENTED. IN ALL CASES, DATA ARE PRESENTED SO AS TO PERMIT DETERMINATION OF THE LABOR, LOCAL CAPITAL, AND FOREIGN EXCHANGE COMPONENTS OF EACH COST. THE SENSITIVITY OF ROAD INVESTMENT DECISIONS TO CHANGE IN BOTH FOREIGN EXCHANGE RATES AND LABOR COSTS IS ALSO ILLUSTRATED BY AN EXAMPLE.

Media Info

  • Media Type: Print
  • Features: Figures; References; Tables;
  • Pagination: pp 44-63
  • Monograph Title: Transportation and economic development
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00201144
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Nov 18 1994 12:00AM