Methods of Cost-Effectiveness Analysis for Highway Projects

TRB's National Cooperative Highway Research Program (NCHRP) Synthesis 142: Methods of Cost-Effectiveness Analysis for Highway Projects presents a brief overview of the traditional economic- analysis methods that have been used in the analysis of highway engineering alternatives. Then, because the earliest work in cost- effectiveness as a structured methodology was in the Defense Department, three basic criteria commonly used by the military are presented: maximize net benefits; minimize the amount of resources required; and maximize the level of service. Data from more than 40 states was assembled to: compare the different methods of cost- effectiveness analysis highway personnel are using and determine which methods are most commonly used and which methods are most innovative; and develop a format that will assist highway personnel in selecting a method to set priorities and make decisions regarding a variety of highway programs or projects. The methods reported are categorized as follows: (1) systems analysis packages; (2) sufficiency-rating-based packages; (3) standard benefit/cost analysis; (4) pavement management systems; (5) operations cost-effectiveness measures; (6) construction cost-effectiveness measures; (7) maintenance cost-effectiveness measures; and (8) private investment cost-effctiveness measures. Examples in each of the categories are presented to show how each category could be very useful in the standard operating practices of every state DOT or highway department.