Highway User Benefit/Cost Analysis in California

Abstract

Recent and timely emphasis on environmental impact and on community involvement in the highway planning process does not eliminate User Benefit/Cost Analysis as a necessary part of the process. The California Department of Transportation has employed user benefit/cost measures for many years. The procedure used today is based on experience and research. It is a compromise between economic rigor and operational simplicity. The current procedure is developed as a computerized User Benefit/Cost Model that provides on-line update capability for all data. The model receives projected traffic demand, existing and proposed highway geometry, and initial project cost as inputs. Separate user benefit/cost indices for safety and delay benefits are calculated. Estimated future benefits and costs (in today’s dollars) are inflated, then discounted to their present worth, using appropriate compound interest relationships.