SUMMARY AND EVALUATION OF ECONOMIC CONSEQUENCES OF HIGHWAY IMPROVEMENTS

THIS REPORT IS BASED ON NINE PREVIOUS NCHRP PROJECTS (2-1 THROUGH 2-9), WHICH IT SEEKS TO INTEGRATE FOR THE PURPOSE OF SUPPLYING THEORY, METHODOLOGY, AND DISCUSSION OF THE ANALYSIS OF THE ECONOMICS AND CONSEQUENCES OF HIGHWAY IMPROVEMENTS IN A WAY THAT WILL AID ANALYSTS IN MAKING STUDIES AND DECISION-MAKERS IN SELECTING HIGHWAY IMPROVEMENT PROJECTS AND PROGRAMS FOR INVESTMENT. THE FUNDAMENTAL APPROACH IS THAT OF SYSTEMS ANALYSIS AND, MORE PARTICULARLY, ECONOMIC ANALYSIS. THE LATTER IS INTERPRETED TO INCLUDE (1) COST-BENEFIT ANALYSIS OF PROPOSALS WHOSE OUTPUTS ARE PRICEABLE AND (2) ANALYSIS OF THE EFFECTIVENESS OF PROPOSALS WHOSE OUTPUTS ARE NOT PRICEABLE. APPENDIX A SUMMARIZES NCHRP PROJECTS 2-1 THROUGH 2-9. APPENDIX B IS A SELF-CONTAINED ANALYTIC TOOL FOR ASSESSING THE SOCIAL AND ECONOMIC CONSEQUENCES OF HIGHWAY LOCATION, DESIGN, AND USE. FIFTEEN CATEGORIES OF IMPACT ARE IDENTIFIED, UNDER WHICH A TOTAL OF 70 VARIABLES IS ASSESSED WITH RESPECT TO CONSEQUENCES, GAINS AND UTILITIES, COSTS AND LOSSES, AND DECISION-MAKING FACTORS. THE MAIN REPORT IS DIVIDED INTO THE FOLLOWING CHAPTERS: FUNDAMENTALS OF ECONOMIC ANALYSIS, THE PPB SYSTEM AS A DECISION-MAKING TOOL, HIGHWAY ENGINEERING ECONOMY, HIGHWAY-USER COSTS AND GAINS, ENGINEERING FACTORS RELATED TO SOCIAL AND ECONOMIC CONSEQUENCES, ECONOMIC THEORY RELATED TO USER AND NONUSER CONSEQUENCES, SOCIAL AND ECONOMIC NONUSER CONSEQUENCES OF HIGHWAY IMPROVEMENT, TECHNIQUES OF EVALUATING ALTERNATIVE PLANS, THE FINAL MANAGEMENT DECISION- MAKING USE OF COMPUTERS IN ECONOMIC ANALYSIS, RESEARCH NEEDS IN ECONOMIC ANALYSIS, AND AN ILLUSTRATIVE ECONOMIC ANALYSIS OF A HYPOTHETICAL INTERSTATE HIGHWAY LOCATION PROPOSAL.