Integrating Travel Demand Model and Benefit–Cost Analysis for Evaluation of New Capacity Highway Projects

Abstract

This study presents a methodology for estimating the benefit–cost ratio for transportation projects by using a regional travel demand model and benefit–cost analysis. The benefit–cost ratio can provide an objective measure with which decision makers can quantitatively evaluate the regional benefits and costs of each proposed transportation project under certain assumptions. This methodology shows the impact of one project on the entire regional transportation network. The key to this methodology is use of the total savings in vehicle hours traveled (VHT) resulting from each proposed project, converted into dollar benefits. The total VHT is estimated with congested travel time and trips instead of a simple summation of each link's VHT. A second key aspect of this methodology is estimating the economic development benefits of the proposed transportation investments. For this process, the Pikes Peak Area Council of Governments used the Transportation Economic Development Impact System (TREDIS) web-based software. The input that TREDIS requires for new capacity transportation projects is total VHT or vehicle miles traveled (VMT) before a project and total VHT or VMT after the project, by trip purpose and travel mode. TREDIS offers default values such as economic value factors for driver and occupant time-saving benefits (dollars per VHT or VMT) and the vehicle cost factor for vehicle cost savings (dollars per VHT or VMT). The case study suggests that the proposed approach can be useful and effective in assessing regional transportation projects by considering their economic impacts.