1. Analysis Purpose
How will the analysis be used?
o to determine if the project should be undertaken
o to compare various transport improvement options (including demand management)
o to establish priorities for approved projects
o to determine how a project should be done
or for some other purpose?
Defining the purpose will help determine what benefits and costs should be included, as well as other
aspects of the analysis.
Examples
Should a new road be built?
The base case would be no new road. The benefits and costs of the new road should be summed and
compared to the base case.
Which highway expansion option provides the greatest benefits?
The benefits and costs of various highway project design options can be compared. The projects with the
greatest net benefits (measured as net-present value, benefit-cost ratio, or internal rate of return) should
be selected.
Which type of transportation improvement provides the greatest benefits?
When evaluating possible ways to improve mobility on a corridor, a highway expansion project can be
compared with improvements to other modes, which could include grade-separated rail transit, a bus
rapid transit (BRT) system. Such analysis should consider all significant costs and benefits, including
congestion reduction, parking costs (motorists require a parking space at each destination, a cost that is
generally avoided if the same trips are made by public transit), user savings, improved mobility for non-
drivers, accident reductions (public transport has lower crash rates than automobile travel), energy
conservation and emission reductions.
Would transportation demand management provide the greatest benefits?
When evaluating ways to improve mobility on a corridor, capacity expansion projects can be compared
with transportation demand management programs, which could include various combinations of
improvements to alternative modes (walking, cycling, ridesharing, public transit, telework), pricing reforms
(more efficient road, parking and fuel pricing, and distance-based vehicle insurance and registration fees),
road space reallocation (such as converting existing general traffic lanes to HOV, HOT or bus lanes), and
trip reduction programs. Such analysis should consider all significant costs and benefits. Special care is
needed to account for the social welfare impacts of demand management strategies.
Should concrete or asphalt paving be used for a resurfacing project?
The only benefits and costs that need be considered are those that differ between alternatives. Is one
type of pavement significantly smoother or safer? What aspects of the construction are different? What is
the replacement cycle for each? What is the replacement cost?
