DOI

10.5703/1288284315219

Abstract

Economic analysis is a critical component of a comprehensive project or program evaluation methodology that considers all key quantitative and qualitative impacts of highway investments. It allows highway agencies to identify, quantify, and value the economic benefits and costs of highway projects and programs over a multiyear timeframe. This research was conducted to provide the Indiana Department of Transportation (INDOT) with a uniform economic analysis methodology. The developed economic evaluation model applies the methodology of life-cycle benefit cost analysis to perform economic analysis for proposed highway projects. As a result of this research, an Excel based computer program, the Indiana Highway Economic Evaluation Model (IHEEM), was developed to provide a convenient tool for INDOT personnel to implement the method. The main costs and benefits contained in the model are agency costs and user benefits. Agency costs include initial costs, routine maintenance costs, rehabilitation costs, and remaining value of the facility. User benefits contain travel time savings, vehicle operating cost savings, and crash reduction savings. In addition to the deterministic method for cost and benefit analysis, an alternative probabilistic approach was also developed and incorporated into IHEEM so that the outputs can be expressed as ranges of values with likelihoods of occurrence.

Report Number

FHWA/IN/JTRP-2013/17

Keywords

economic analysis, agency costs, user benefits, initial costs, routine maintenance costs, rehabilitation costs, travel time savings, vehicle operating cost savings, and crash reduction savings, probabilistic analysis

SPR Number

3429

Performing Organization

Joint Transportation Research Program

Publisher Place

West Lafayette, Indiana

Date of this Version

12-2013

Additional Files
Technical Summary.pdf (833 kB)
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