Applying Benefit/Cost Analysis To Identify and Measure the Benefits of Intelligent Transportation Systems

Abstract

The guidance provided by benefit/cost analysis (BCA) is used to identify the measures appropriate for assessing the benefits of intelligent transportation systems (ITS) investments using BCA. Proper recognition of how ITS differs from conventional transportation improvements can avoid expensive data collection, serious underestimates of the benefits of ITS, and mistakes in our planning and investment policies. The steps in BCA are described, including its strict rules governing the inclusion of benefit measures. An ITS causal model chain is presented that links the five traditional ITS goals (efficiency, mobility, safety, productivity, and energy/environment). The model chain varies from the conventional planning model because the ITS mobility and productivity benefit measures do not vary directly with its safety, energy, and environmental impacts. Recommendations are given for avoiding double counting ITS mobility and productivity benefits, and for identifying them correctly. Errors in valuing the mobility benefit using observed data on travel and ITS product and service buying behavior are described, as is the potential for serious underestimates of ITS mobility benefits from using observed or predicted travel time savings as the primary mobility benefit measure. Instead, direct measurement and valuation of the ITS mobility benefit using customer satisfaction (stated preference) survey methods avoid the problems of ( a) how exactly to measure the utility-generating features of ITS user benefits, and ( b) observing the behavioral responses to ITS information, which involve expensive data collection. Measuring customer satisfaction directly can also simplify other areas of ITS evaluation, including avoiding traditional transportation modeling in some instances.