Roadway Economic Analysis

Economic Analysis

With increased competition for limited financial resources, transportation agencies are increasingly trying on economic analysis tools to provide the information needed to make strategic investment decisions and to improve the agency’s overall accountability. The results of an economic analysis can be used to demonstrate the long-term consequences of alternate strategies or to assess funding levels needed to achieve performance targets. A comprehensive economic analysis considers both benefits and costs associated with highway programs (or projects) over a multiyear analysis period. The information can provide useful information to support the agency’s decision processes, with consideration given to the impacts on both the agency and the users of the facilities. (Continued below photo)

Applied Pavement Technology’s economic analysis tools address the needs of its clients at several different levels. Whether using a life-cycle cost analysis to evaluate alternate pavement designs, or a benefit/cost analysis to evaluate investment strategies, Applied Pavement Technology has the knowledge and experience required to help transportation agencies make the best possible return on their infrastructure investment.

Contact Applied Pavement Technology for help in any of the following areas:

Life-cycle cost analysis (deterministic or probabilistic) – to determine the most affordable solution based on an analysis of both agency (such as design, maintenance, and rehabilitation costs) and user costs (such as vehicle operating, crash, and delay costs) over an analysis period.
Benefit/cost analysis – to determine whether the benefits associated with a project outweigh the costs or to select which projects should be funded under a constrained budget.
Risk analysis – to determine the sensitivity of the analysis results to the variability associated with each input. The results can be presented in a number of formats, including a probabilistic outcome distribution as shown below. In this example, alternates 1 and 3 have the highest mean values (the value under the peak of the curve) yet alternate 2 has a tighter range of potential values, which may represent a lower-risk alternative.