COST-EFFECTIVENESS ANALYSIS: THE PROGRAM OF THE COLORADO DEPARTMENT OF HIGHWAYS

The cost-effectiveness program developed by the Colorado Department of Highways is described. The program includes a computer model and a workbook that explains the computing procedures, input variables, and sources of input information. The computer and the workbook have enabled the department's district personnel to perform complex studies even though many of them have very little background in economic or benefit-cost analysis. The program is one of the first attempts to computerize the Stanford Research Institute methodology for analysis of transportation user benefits. The program quantifies the net present value-of-time, operating, accident, and maintenance benefits of highway project alternatives; compares benefits with required capital costs; and presents results in the form of first- and second-order benefit/cost ratios, net present values, and a verbal statement that indicates the most cost-effective alternative. The computer program also allows sensitivity analysis of selected variables. (Author)