Committee on Urban Transportation Economics and Policy (CUTEP) of the Urban Transportation Division American Society of Civil Engineers

This represents the beginning of a project to develop a comprehensive on-line guide to proper benefit-cost analysis of transportation projects. Click here for a description of the scope of this project. Your comments and contributions are welcome. Click topics in the following outline to access the related information. (Topics remain unlinked in cases where information is not yet posted.)
HOW TO USE THIS GUIDE (CLICK HERE)               ACKNOWLEDGEMENTS

A. General Issues - Defining the Problem and Carrying Out Benefit-Cost Analysis

1. Motivation for Benefit-Cost Analysis
   -When Is B-C Analysis Necessary and When is it Not?
2. Defining Types of Benefit-Cost Evaluation
   - What are the Variants and Relatives of B-C Analysis and When Should They Be Used?
3. Selecting Appropriate Level and Basis for Analysis
  - How to Select the Appropriate Base Case, Time Period and Geographic Level of Analysis.
4. Types of Benefits
   - How to Select the Types of Benefits to Measure and Avoid Under or Over-Counting.
5. Types of Costs
   - How to Select the Types of Costs to Measure and Avoid Under or Over-Counting.

1. Valuation of User Impact Components
2. Techniques for Assessing User Impacts
3. Treatment of Externality Impacts When Assessing User Impacts

1. Issue of Double Counting - How Economic Impacts Relate to User Impacts
2. Valuation of Direct Economic Impacts
3. Techniques for Assessing Indirect and Induced Impacts on Economy
4. Alternative Measures of Economic Growth/Decline
5. Treatment of Externality Impacts When Assessing Economic Impacts

1. Caution on Application of Quality of Life Factors in B-C Analysis
2. Valuation of Environmental & Quality of Life Factors
3. Techniques for Assessing Environmental & Quality of Life Impacts
4. Relationship of Quality of Life Factors to Externality Impacts on Users & Economy

1. Distributional Effects
2. Uncertainty Factors

1. Calculation of Total Benefits and Costs
2. Time Element of Benefit-Cost Analysis
3. Presentation and Interpretation of Findings

1. Web Sites
2. Reference Literature
3. Case Study Reports
4. Training Resources
5. Software

A. General Issues - Defining the Problem and Carrying Out Benefit-Cost Analysis

1. Motivation for Benefit-Cost Analysis
    -When Is B-C Analysis Necessary and When is it Not?

a. for budgeting
b. for design
c. for planning

a. B / C Ratio
b. Net Benefit (B - C)
c. Marginal & Incremental B-C
d. Feasibility
e. Cost Effectiveness
f. When B-C Analysis is Not Needed
g. Alternative Approaches for Decision Support

a. Clarifying the Project Type and Timing, and Use of Results
b. Determining the Appropriate Time Period
(considering period of: construction, financing, useful life)
c. Determining the Appropriate Geographic Level of Analysis
(considering area of: sponsorship, direct project impact, distributional interest)
d. Determining the Appropriate Impact Perspective
(considering: users, residents, business and/or government agencies)
e. Determining the Appropriate Base Case
(considering: "do nothing" or "alternative default plans)
f. Determining Appropriate Project Alternatives for Comparison
(considering budget and spending options)

a. Transport System Efficiency -- user benefit: time, cost, safety
(definitions, sources, precision, importance)
b. Economy -- employment, income, value added, or output
(definitions, sources, precision, importance)
c. Quality of Life -- environmental, social
(definitions, sources, precision, importance)
d. Fiscal -- public expenditures and revenues
(definitions, sources, precision, importance)
e. Land Development -- land use or property values
(definitions, sources, precision, importance)
f. Externality Impacts - effects on outside parties
(definitions, sources, precision, importance)
g. Combinations -- societal welfare or "full benefit" analysis
(definitions, sources, precision, importance)

a. Treatment of Quantitative vs. Qualitative Costs
b. Consideration of Project Size, Scope and Budget in Defining Scope of Costs
c. Consideration of Cost Precision and Importance for Benefit-Cost Analysis
d. Sources for Obtaining Cost Data and Utilizing Existing Literature
e. Treatment of Budgeting, Financing & Timing Options
f. Type of Costs -- construction, maintenance, ongoing operations, financing
(definitions, sources, precision, importance for B-C measurement)
g. Type of Party Paying Costs -- public or private; local, state or national
(definitions, implications for B-C measurement)
h. Type of Financing - treatment in B-C analysis

1. Valuation of User Impact Components

a. General Issues
b. Time -- by mode; driver/passenger; business/personal purpose; in/out-of-vehicle
c. Operating Cost -- fuel, maintenance
d. Safety -- types of injuries: fatality, personal injury, property damage

a. General Issues
b. Single project user effects - spreadsheet approaches
c. Single mode effects - MicroBenCost, Net_BC, etc.
d. Multi-modal effects - STEAM, etc.

a. Additional Business Productivity Factors
(importance, options for recognition within or outside of the B-C analysis)
b. Additional Quality of Life Factors
(importance, options for recognition within or outside of the B-C analysis)
c. Relationship to Distributional Impacts
d. Hybrid Approaches: Avoiding Under and Over-Counting of Benefits

1. Issue of Double Counting - How Economic Impacts Relate to User Impacts

2. Valuation of Direct Economic Impacts

a. Direct Spending Effects - construction, maintenance, operations
b. Direct Business Cost Savings - value of user benefits
c. Other Business Cost Savings - logistics/inventory/ processing, scale economies
d. Regional Business Markets - tourism, business relocation effects
e. Personal Cost Savings - effects on disposable income

a. General Concepts
b. Static Approaches (Input/output models) - RIMS, IMPLAN, PC-IO, etc.
c. Dynamic Simulation Approaches - REMI, WEFA/DRI, etc.

a. Employment (jobs)
b. Personal Income
c. Value Added (GRP)
d. Business Output (sales)
e. Property Values

a. Additional User Impacts Not Affecting Money Flows
(importance, options for recognition within or outside of the B-C analysis)
b. Additional Quality of Life Factors
(importance, options for recognition within or outside of the B-C analysis)
c. Relationship to Distributional Economic Impacts
d. Hybrid Approaches: Avoiding Under and Over-Counting of Benefits

1. Caution on Application of Quality of Life Factors in B-C Analysis

a. Issues of Public Consensus on Social Valuation of Quality of Life Factors
b. Alternatives for Handling Quality of Life Factors in Decision-Making
(options within and outside of B-C analysis)
c. Effects of Including of Quality of Life Factors in B-C Analysis

a. air quality
b. wetlands & water quality
c. noise
d. visual impact
e. social/neighborhood factors
f. other external impacts

a. air quality impact models
b. wetlands & water quality models
c. noise impact models
d. measures of impacts capitalized in property values
e. measures of willingness-to-pay
f. non-monetary measures

a. Issues in Double Counting with User Impacts
b. Issues in Double Counting with Economic / Productivity Impacts
c. Relationship to Distributional Economic Impacts
d. "Full Costing" Approaches for Measuring Benefits and Dis-Benefits

1. Distributional Effects

a. Valuation of Distributional Impacts
b. Techniques for Assessing Distributional Impacts
c. Importance & Treatment in Benefit/Cost Analysis
d. Presentation and Use

a. Estimation of Precision
b. Sensitivity Analysis
c. Importance & Treatment in Benefit/Cost Analysis
d. Presentation and Use

1. Calculation of Total Benefits and Costs

a. Calculation of Total Benefits
b. Calculation of Total Costs

a. Net Present Value Calculation
b. Time Period Selection
c. Discount Rate Selection
d. Treatment of Financing Costs
e. Treatment of Residual Value
f. Treatment of Uncertainty

a. Planning Applications
b. Design Applications
c. Communications Issues
d. Public Credibility Issues - Pitfalls to Avoid

1. Web Sites

a. Government agencies
• Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs - U.S. Office of Management and Budget (http://www.whitehouse.gov/WH/EOP/OMB/html/circulars/a094/a094.html)
• Benefit/Cost Analysis Guide for Regulatory Programs – Treasury Board of Canada (http://www.tbs-sct.gc.ca/tb/rad/english/cbgewix.html)
• Benefit/Cost Guide & Case Study - Treasury Board of Canada (http://publiservice.tbs-sct.gc.ca/fin/BnftGuide&Case_e.html)
• A Guide for Cost-Effectiveness and Cost-Benefit Analysis of State and Local Ground Water Protection Programs (http://www.epa.gov/OWOW/watershed/tools/econ.html)
• A Primer on Economic Impact Analysis (http://www.edrgroup.com/B23.html)
b. Other organizations

a. Books on Benefit-Cost Analysis
b. Reports and Guidebooks on Benefit-Cost Analysis
c. Sources of Data for Estimating User Benefits
d. Sources of Data for Estimating Other Economic Benefits

       a. A Bypass Taxiway at Vancouver Airport
         b. The Expansion and Refurbishment of the Terminal Building at Halifax Airport
         c. The Acquisition of a Financial/Materiel Management Information System

4. Training Resources

5. Software

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