Development of Tools for Assessing Wider Economic Benefits of Transportation (2014)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

The Second S T R A T E G I C H I G H W A Y R E S E A R C H P R O G R A M TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2014 www.TRB.org REPORT S2-C11-RW-1 Development of Tools for Assessing Wider Economic Benefits of Transportation Economic DEvElopmEnt REsEaRch GRoup, inc. Boston, Massachusetts cambRiDGE systEmatics, inc. Knoxville, Tennessee icF intERnational Sacramento, California tExas a&m tRanspoRtation institutE College Station, Texas WERis, inc. Washington, D.C.

Subject Areas Economics Highways Planning and Forecasting

SHRP 2 Reports Available by subscription and through the TRB online bookstore: www.TRB.org/bookstore Contact the TRB Business Office: 202-334-3213 More information about SHRP 2: www.TRB.org/SHRP2 SHRP 2 Report S2-C11-RW-1 ISBN: 978-0-309-27360-2 © 2014 National Academy of Sciences. All rights reserved. Copyright Information Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copy- right to any previously published or copyrighted material used herein. The second Strategic Highway Research Program grants permission to repro- duce material in this publication for classroom and not-for-profit purposes. Per- mission is given with the understanding that none of the material will be used to imply TRB, AASHTO, or FHWA endorsement of a particular product, method, or practice. It is expected that those reproducing material in this document for educational and not-for-profit purposes will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from SHRP 2. Note: SHRP 2 report numbers convey the program, focus area, project number, and publication format. Report numbers ending in “w” are published as web documents only. Notice The project that is the subject of this report was a part of the second Strategic Highway Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical committee selected to monitor this project and review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical committee and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the second Strategic Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. The Second Strategic Highway Research Program America’s highway system is critical to meeting the mobility and economic needs of local communities, regions, and the nation. Developments in research and technology—such as advanced materials, communications technology, new data collection technologies, and human factors science—offer a new oppor- tunity to improve the safety and reliability of this important national resource. Breakthrough resolution of significant trans- portation problems, however, requires concentrated resources over a short time frame. Reflecting this need, the second Strategic Highway Research Program (SHRP 2) has an intense, large-scale focus, integrates multiple fields of research and technology, and is fundamentally different from the broad, mission-oriented, discipline-based research programs that have been the mainstay of the highway research industry for half a century. The need for SHRP 2 was identified in TRB Special Report 260: Strategic Highway Research: Saving Lives, Reducing Conges- tion, Improving Quality of Life, published in 2001 and based on a study sponsored by Congress through the Transportation Equity Act for the 21st Century (TEA-21). SHRP 2, modeled after the first Strategic Highway Research Program, is a focused, time- constrained, management-driven program designed to comple- ment existing highway research programs. SHRP 2 focuses on applied research in four areas: Safety, to prevent or reduce the severity of highway crashes by understanding driver behavior; Renewal, to address the aging infrastructure through rapid design and construction methods that cause minimal disruptions and produce lasting facilities; Reliability, to reduce congestion through incident reduction, management, response, and miti- gation; and Capacity, to integrate mobility, economic, environ- mental, and community needs in the planning and designing of new transportation capacity. SHRP 2 was authorized in August 2005 as part of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The program is managed by the Transportation Research Board (TRB) on behalf of the National Research Council (NRC). SHRP 2 is conducted under a memorandum of understanding among the American Associa- tion of State Highway and Transportation Officials (AASHTO), the Federal Highway Administration (FHWA), and the National Academy of Sciences, parent organization of TRB and NRC. The program provides for competitive, merit-based selection of research contractors; independent research project oversight; and dissemination of research results.

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. C. D. (Dan) Mote, Jr., is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Victor Dzau is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. (Dan) Mote, Jr., are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transportation Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisci- plinary, and multimodal. The Board’s varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transporta- tion, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org

ACKNOWLEDGMENTS This work was sponsored by the Federal Highway Administration in cooperation with the American Associa- tion of State Highway and Transportation Officials. It was conducted in the second Strategic Highway Research Program (SHRP 2), which is administered by the Transportation Research Board of the National Academies. The project was managed by David Plazak, Senior Program Officer for SHRP 2 Reliability and Capacity. The research reported herein was conducted by a team composed of Economic Development Research Group (which designed the collection of spreadsheet tools and authored Chapters 1, 2, and 6) and four subcontractors. They are Cambridge Systematics, Inc. (which co-authored Chapter 3 and the reliabil- ity tool), Weris, Inc. (which co-authored Chapter 3 and the reliability tool), ICF International (which authored Chapter 4 and the intermodal connectivity tool), and the Texas A&M Transportation Institute (which authored Chapter 5 and the accessibility tools). The primary authors for this study were Glen Weisbrod and Adam Winston of Economic Devel- opment Research Group; Richard Margiotta of Cambridge Systematics, Inc.; Jeff Ang-Olson and Anjali Mahendra of ICF International; Sharada Vadali of the Texas A&M Transportation Institute; and Zongwei Tao of Weris, Inc. SHRP 2 STAFF Ann M. Brach, Director Stephen J. Andrle, Deputy Director Neil J. Pedersen, Deputy Director, Implementation and Communications Cynthia Allen, Editor Kenneth Campbell, Chief Program Officer, Safety JoAnn Coleman, Senior Program Assistant, Capacity and Reliability Eduardo Cusicanqui, Financial Officer Richard Deering, Special Consultant, Safety Data Phase 1 Planning Shantia Douglas, Senior Financial Assistant Charles Fay, Senior Program Officer, Safety Carol Ford, Senior Program Assistant, Renewal and Safety Jo Allen Gause, Senior Program Officer, Capacity James Hedlund, Special Consultant, Safety Coordination Alyssa Hernandez, Reports Coordinator Ralph Hessian, Special Consultant, Capacity and Reliability Andy Horosko, Special Consultant, Safety Field Data Collection William Hyman, Senior Program Officer, Reliability Linda Mason, Communications Officer Reena Mathews, Senior Program Officer, Capacity and Reliability Matthew Miller, Program Officer, Capacity and Reliability Michael Miller, Senior Program Assistant, Capacity and Reliability David Plazak, Senior Program Officer, Capacity and Reliability Rachel Taylor, Senior Editorial Assistant Dean Trackman, Managing Editor Connie Woldu, Administrative Coordinator

F O R EWO R D David Plazak, SHRP 2 Senior Program Officer, Reliability and Capacity The goal of the SHRP 2 Capacity focus area goal is to develop approaches and tools for system- atically integrating environmental, economic, and community requirements into the analysis, planning, and design of new highway capacity. The Capacity Technical Coordinating Committee set out to develop a suite of simple-to-use tools that could assist transportation agencies to assess the economic implications of proposed additions to highway capacity and, in turn, land use. Part of this objective was served by Project C03, which produced 100 detailed before-and-after case studies on the long-term economic and land development impacts of various transportation improvement projects around the nation. An accompanying web portal called T-PICS allows transportation agency staff and others to quickly assess the order-of- magnitude impacts of projects on the regional economy using a transparent reasoning-by- analogy approach. The C03 research report has been published and T-PICS is available as a beta test website at http://www.tpics.us/. As a part of the C03 research project, the team considered what other potential SHRP 2 research and development activities would be useful in assisting transportation agencies (primarily state departments of transportation and metropolitan transportation organizations) to better understand the implications of proposed capacity investments on their regional economies. The result of this investigation was Project C11. Project C11 addresses benefit-cost analysis as opposed to economic impact assessment, which was the set of techniques addressed by Project C03. The C11 research team worked to improve the state of the practice in assessing the wider economic benefits of transportation capacity projects. Specifically, they addressed three classes of project benefits that have been generally acknowledged to exist but have been difficult for transportation agencies to address in a systematic and quantitative manner: • Travel time reliability benefits. These benefits derive from reductions in nonrecurrent traffic congestion, improving travel time reliability for both passengers and freight. • Intermodal connectivity benefits. Some transportation projects lead to considerable reductions in access time to key transfer facilities such as airports and marine ports and terminals. These projects often have important benefits for freight shippers and receivers. • Market access benefits. Some transportation projects lead to considerable economic ben- efits in terms of improved breadth of access to markets for truck deliveries and to labor markets for commuters. Either of these might have major implications in terms of regional economic growth. Finally, the C11 project team produced an updated benefit-cost accounting framework to tie together these wider categories of benefits with classes of project benefits that have been traditionally considered in benefit-cost analysis in transportation. These include benefits from improved safety, travel time savings (from reductions in recurrent traffic congestion), and vehicle operating cost savings. Besides this final research report, Project C11 produced a set of downloadable spreadsheet tools and the user guides and instructions transportation agency staff and others need to use them. Because it addresses the value of improving travel time reliability, the reliability spreadsheet was tested in 2013 and will be tested during 2014 as part of the SHRP 2 Reliability focus area’s L38 analytical tool pilot test project.

C O N T E N T S 1 Executive Summary 1 Reliability 1 Intermodal Connectivity 2 Market Access 3 CHAPTER 1 Introduction 3 Project Overview 3 Background: Relationship to SHRP 2 Program 5 CHAPTER 2 Accounting Framework 5 Overview of Wider Transportation Benefits 8 Application of Wider Transportation Impact Measures 11 Accounting Framework 15 Accounting Framework User’s Guide and Instructions 21 CHAPTER 3 Reliability 21 Technical Guide 29 Reliability Module User’s Guide and Instructions 39 CHAPTER 4 Connectivity 39 Technical Guide 41 Connectivity Module User’s Guide and Instructions 46 CHAPTER 5 Accessibility 46 Technical Guide 59 Access to Buyer–Seller Markets Module User’s Guide and Instructions 66 Access to Labor Markets Module User’s Guide and Instructions 80 CHAPTER 6 Conclusions: Accomplishments and Needs 80 Accomplishments So Far 80 Remaining Needs 82 References