Economic Productivity and Transportation Investment Priorities

State departments of transportation (DOTs) and other agencies generally must consider many more opportunities for improving the transportation system for which they are responsible than they have funding to implement. Agency staff must evaluate the relative merits of investment options in an effort to determine which will produce the greatest benefit for taxpayers and citizens who are the system's owners. DOTs typically use a variety of methods in making these evaluations, reflecting the various objectives to be met--for example, greater safety and environmental protection, and cost savings. One widely used method is cost-benefit analysis (BCA), which undertakes to assess--usually in monetary terms--the relationship between an investment's costs and the measurable economic benefits to be received over the lifetime of that investment. BCA typically makes its assessments at a very aggregated level and is substantially influenced by roadway-user travel-time savings. These savings certainly are benefits for the population that enjoys them, but have only a general relationship with the productivity of the region's specific businesses and labor force. These productivity gains are an important consequence of transportation system improvements. Fast and reliable delivery of goods and services, for example, can reduce the need for delivery vehicles, warehouse space, and investment in equipment and facilities; and increase the rate at which workers can complete their tasks. The cumulative effect of multifactor productivity gains can influence the competitiveness of firms in a region and the attractiveness of the region for companies and workers considering relocation from other areas. Research presented in NCHRP Report 342: Primer on Transportation, Productivity, and Economic Development, published in 1991, considered the relationship between transportation investments and economic growth. The report, intended to assist DOTs and other decision makers to ensure that transportation policies and investments promote enhanced growth as well as regional gains, relies substantially on a BCA framework and notes the difficulty of measuring productivity gains within this framework. That report and more recent literature suggest that typically used BCA methods generally neglect, miscalculate, or misinterpret the increased productivity attributable to transportation system improvements. Research is needed to develop guidance on consistent and defensible methods DOTs and other agencies can use to forecast and value productivity gains attributable to transportation system improvements in a region. The research should address estimation and valuation of labor and capital productivity gains associated, for example, with enhanced access and mobility, congestion relief, improved safety, and reduced vehicle operating costs and emissions. The research should consider how measures of productivity improvement may be used in combination with other types of analysis--for example, benefit-cost analyses, safety assessments, and environmental impact reviews--to establish investment priorities. The objective of this research is to develop a methodology and guide for incorporating productivity gains in analysis and prioritization of transportation investments. The methodology and guide will encourage DOTs and other agencies to apply consistent analysis methods and produce results that facilitate public decision making about transportation improvement priorities within a state or other large region.


  • English


  • Status: Proposed
  • Contract Numbers:

    Project 02-24

  • Sponsor Organizations:

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590

    National Cooperative Highway Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC  United States  20001
  • Project Managers:

    Lemer, Andrew

  • Start Date: 20111208
  • Expected Completion Date: 0
  • Actual Completion Date: 0
  • Source Data: RiP Project 29073

Subject/Index Terms

Filing Info

  • Accession Number: 01463252
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project 02-24
  • Files: TRB, RiP, USDOT
  • Created Date: Jan 3 2013 2:20PM