The logsum as an evaluation measure: Review of the literature and new results

The logsum is a measure of consumer surplus in the context of logit choice models. In spite of the very frequent use of logit models in transport, project assessment is only rarely done using logsums. Instead in project evaluation or appraisal, changes in transport costs and time (borrowing values of time from some source) are commonly used to get the traveller benefits. The paper contains a review of the theoretical and applied literature on the use of logsums as a measure of consumer surplus change in project appraisal and evaluation. It then goes on to describe a case study with the Dutch National Model System for transport in which the logsum method and the commonly used value of time method are compared for a specific project (high speed trains that would connect the four main cities in the Randstad: Amsterdam, The Hague, Rotterdam and Utrecht).     

Effects of changing highway design speed

In an effort to increase the operational efficiency of highways, South Korea has been increasing its design speed recently. However, the use of higher design speed will also increase construction costs. Moreover, increasing the design speed is expected to have an impact on safety. Hence, there is a strong need to demonstrate that the benefits outweigh the cost of having a higher design speed. This study surveyed a sample of design engineers to determine their awareness of the consequences of increasing design speed and their assessment of the right design speed for an actual rural arterial road. In addition to the survey, a case study of three recently upgraded highways was conducted to determine the changes in traffic volumes, speeds, travel times and accidents. The construction costs associated with the upgrades were also reported. Copyright © 2011 John Wiley & Sons, Ltd.     

Public responses to policies designed to internalise environmental and social externalities from road transport in New Zealand

Based on a public survey of registered voters, we explore four options for internalising the social and environmental costs of road transport. The options were presented together with generalised factual information about their benefits and costs. Respondents are highly supportive of fuel use efficiency standards and exhaust gas quality standards, with lesser support for proposed initiatives of road user charges and speed reduction. Demographic analysis of responses enables identification of those who might favour or oppose particular options. In this case women are identified as being strongly supportive of the speed reduction option.     

Accessibility appraisal of land-use/transport policy strategies: More than just adding up travel-time savings

We examine the accessibility benefits associated with some land-use policy strategies for the Netherlands that anticipate on expected climate change. A disaggregate logsum accessibility measure using the Dutch national land-use/transport interaction model TIGRIS XL is used to compute changes in consumer surplus. The measure provides an elegant and convenient solution to measure the full accessibility benefits from land-use and/or transport policies, when discrete choice travel-demand models are available that already produce logsums. It accounts for both changes in generalised transport costs and changes in destination utility, and is thus capable of providing the accessibility benefits from changes in the distribution of activities, due to transport or land-use policies. The case study shows that logsum accessibility benefits from land-use policy strategies can be quite large compared to investment programmes for road and public transport infrastructure, largely due to changes in trip production and destination utility, which are not measured in the standard rule-of-half benefit measure.     

A comparison of the sustainability of public and private transportation systems: Study of the Greater Toronto Area

A macroscopic assessment of the impacts of private and public transportation systems on the sustainability of the Greater Toronto Area (GTA) is undertaken from economic, environmental and social perspectives. The methodology draws upon the urban metabolism and sustainability indicators approaches to assessing urban sustainability, but compares modes in terms of passenger-kms. In assessing the economic sustainability of a city, transportation should be recognized as a product, a driver and a cost. In 1993, the traded costs of automobile use in the GTA were approximately balanced by the value of the automobile parts and assembly industry. But local transit costs 1/3 to 1/6 of the auto costs per person-km, in traded dollars, mainly because local labour is the primary cost.Public transportation is more sustainable from an environmental perspective. Automobile emissions are a major contributor to air pollution, which is a serious contemporary environmental health problem in Toronto. Public transportation modes are less energy intensive (including indirect energy consumption) and produce CO₂ at an order of magnitude lower, although these benefits are partially undermined by under-utilization of transit capacity and the source of electricity generation.The social benefits of automobile use are likely more significant than costs in determining GTA residents' preferential mode choice. The speed and access of auto use provide important economic benefits, e.g. relating to employment and product choice. Nevertheless, offsetting the service attributes of private transportation are large social costs in terms of accidents. The costs of automobile insurance provide one tangible measure of such negative impacts.In order to improve the sustainability of the GTA, innovative approaches are required for improving the performance level of public transportation or substantially reducing the need for the service level provided by automobiles. Efforts such as greater integration of bicycles with public transit, or construction of light-rail systems in wide roadways, might be considered. But to be sustainable overall, a transportation system has to be flexible and adaptable and so must combine a mixture of modes.     

How much do people value the environment?

The selection and evaluation of road schemes through the Leitch framework is based on a combination of cost-benefit analysis and environmental impact assessment. Both techniques involve the definition and valuation of a number of costs and benefits. These costs and benefits are defined and valued in isolation to each other so that we know virtually nothing about the relative valuation that people assign to different types of costs and benefits which might affect them directly or indirectly. This paper outlines the development of a method which allows people to conceptualise the costs and benefits of a road scheme in their own terms and then to rank schemes in relation to those costs and benefits. This method is based upon an interview process involving the use of repertory grid technique. The information from the repertory grid technique is used as a sound basis for determining trade-offs between attributes and for attempting to obtain monetary valuations of different project attributes. A number of exploratory interviews are reported which outline some of the difficulties with a number of the survey features including the choice of case-study, interviewer and information biases and sample and non-response biases. Various ways of dealing with these difficulties are discussed.     

Cost-benefit analysis of alternative vehicles in the Philippines using immediate and distant future scenarios

Alternative vehicle technologies promise a sustainable future by reducing carbon emissions and pollution. However, their widespread adoption tends to be slow due to high costs and uncertainties in benefits. Using a life cycle-based approach, this study calculates ownership savings and societal benefits for various alternative vehicle technologies against their baseline vehicle technology (e.g. gasoline or diesel). The assessment is performed from a developing country context – in the Philippines. Furthermore, immediate and distant future scenarios are modeled. The immediate future scenario assesses costs and benefits if the shift is to happen now, while the distant future scenario considers the effect of widespread autonomous driving and ridesharing. The results of the study echo the significant societal benefits from electric- and fuel cell-powered vehicles found in literature, but they are hindered by high ownership costs. In the immediate future, the diesel hybrid electric vehicle can potentially have both positive societal and operational costs for public transportation. For a gasoline-powered private passenger car, a simple shift to diesel, 20% biodiesel or 85% methanol can be beneficial. In the distant future, it is expected that autonomous, rideshared vehicles can potentially lure people away from driving their own vehicles, because of lower costs per passenger-kilometer while sustaining the privacy and comfort of a private car.     

A cost–benefit analysis of the Stockholm congestion charging system

This paper presents a cost–benefit analysis of the Stockholm congestion charging system, based on the observed rather than on the model-forecasted data. The most important data sources are travel time and traffic flow measurements made in the year before the charges were introduced (during April 2005) and during the first spring with the charges (during April 2006, 4 months after the charges were introduced). Using matrix calibration, effects on the non-observed link flows and travel times are extrapolated, enabling us to calculate the social value of changes in travel times and travel costs. Impacts on traffic safety and emissions are calculated using standard Swedish CBA relationships. The system is shown to yield a significant social surplus, well enough to cover both investment and operating costs, provided that it is kept for a reasonable lifetime: investment and startup costs are “recovered” in terms of social benefits in around 4 years.     

Simulating pedestrian movements at signalized crosswalks in Hong Kong

This paper presents a new pedestrian simulation (PS) model for signalized crosswalks in Hong Kong. This PS model is capable of estimating the variations of walking speed particularly on the effects of bi-directional pedestrian flows so as to determine the minimum required duration of pedestrian crossing time. Video records taken from the observational surveys at the selected crosswalk in urban area were used to extract the required data for model calibration. It was found that the design walking speed for signalized crosswalks should be varied by the effects of the bi-directional pedestrian flows. It was also interesting to note that the negative impact of the bi-directional flow effects (ranging from uni-directional to bi-directional pedestrian flows) on the chance of pedestrian crossing the crosswalk is increasing from free-flow to at-capacity flow conditions. The new PS model is also validated using an independent data set so as to examine the reliability of the simulation results. The validation results show that the new PS model can provide an accurate evaluation on the changes of walking speed and its standard deviation under different scenarios with particular emphasis on the effects of the bi-directional pedestrian flows. The advancement of this PS model can be applied to assess the effects of each improvement measure and to evaluate the benefits of each scenario in practice.     

On the value of highway travel time information systems

After the widespread deployment of Advanced Traveler Information Systems, there exists an increasing concern about their profitability. The costs of such systems are clear, but the quantification of the benefits still generates debate. This paper analyzes the value of highway travel time information systems. This is achieved by modeling the departure time selection and route choice with and without the guidance of an information system. The behavioral model supporting these choices is grounded on the expected utility theory, where drivers try to maximize the expected value of their perceived utility. The value of information is derived from the reduction of the unreliability costs as a consequence of the wiser decisions made with information. This includes the reduction of travel times, scheduling costs and stress. This modeling approach allows assessing the effects of the precision of the information system in the value of the information.Different scenarios are simulated in a generic but realistic context, using empirical data measured on a highway corridor accessing the city of Barcelona, Spain. Results show that travel time information only has a significant value in three situations: (1) when there is an important scheduled activity at the destination (e.g. morning commute trips), (2) in case of total uncertainty about the conditions of the trip (e.g. sporadic trips), and (3) when more than one route is possible. Information systems with very high precision do not produce better results. However, an acceptable level of precision is completely required, as information systems with very poor precision may even be detrimental. The paper also highlights the difference between the user value and the social value of the information. The value of the information may not benefit only the user. For instance, massive dissemination of travel time information contributes to the reduction of day-to-day travel time variance. This favors all drivers, even those without information. In these situations travel time information has the property that its social benefits exceed private benefits (i.e. information has positive externalities). Of course, drivers are only willing to cover costs equal or smaller than their private benefits, which in turn may justify subsidies for information provision.     

An epsilon-optimal algorithm considering greenhouse gas emissions for the management of a ship’s bunker fuel

This paper provides an algorithm to minimize the fixed ordering, purchase, and inventory-carrying costs associated with bunker fuel together with ship time costs; and environmental costs associated with greenhouse gas emissions. It determines the optimum ship speed, bunkering ports, and amounts of bunker fuel for a given ship’s route. To solve the problem, we use an epsilon-optimal algorithm by deriving a property. The algorithm is illustrated by applying it to typical sample data obtained and the effects of bunker prices, carbon taxes, and ship time costs on the ship speed are analyzed. The results indicate that the ship speed and CO₂ emissions are highly sensitive to the factors considered.     

Winter problems on mountain passes – Implications for cost-benefit analysis

Cost-benefit analysis is a tool in government decision-making for determining the consequences of alternative uses of society’s scarce resources. Such a systematic process of comparing benefits and costs was adopted in early years for transportation projects and it has been the subject of much refining over the years. There are still some flaws, however, in the application of the method. In this article we have studied the impact of weather conditions on traffic speed on low traffic roads often exposed to adverse weather. This is an issue not currently considered in the cost-benefit analysis of road projects. By using two analytical approaches—structural equation modelling and classification and regression tree analysis—the impact of the weather indicators temperature, wind speed, and precipitation on traffic speed has been quantified. The data relates to three winter months on the European Route 6 road over the mountain pass Saltfjellet in Norway. Increase in wind speed, increase in precipitation and temperatures around freezing point all caused significant decrease in traffic speed in the case studied. If actions were taken to reduce the impact of adverse weather on traffic (e.g. by building a tunnel through the mountain) this study indicates that the road users would gain a total benefit of approximately 2,348,000 NOK (282,000 EUR) each winter at Saltfjellet if all the weather related benefits were included. We argue that this is a significant number that is highly relevant to include in CBAs. This applies both to the CBAs of new transportation projects as well as when resources are allocated for operation, maintenance, and monitoring of the existing transport systems. Including the weather related benefits would improve the application of CBA as a decision-making tool for policy makers.     

The 55mph speed limit on US roads: comments on Godwin and Kulash's analysis

There is probably no way to evaluate the impact of the 55 mph limit in 1974 objectively—the necessary data were never collected. Godwin and Kulash assume a current saving of 3000 lives per year. This number is not the objective result of some explicit procedure, but rather the judgement of two conscientious experts; it is not subject to replication by other experts. Furthermore, the quality of their estimate is limited by the quality of the historical studies they are using for input: those studies relied on ‘best guesses’ because they did not have the necessary basic data. No amount of heroic effort by Godwin and Kulash can overcome these inherent deficiencies.

It is almost as difficult to quantify the benefits of the 55 mph limit today. The regression results reported above find no statistically discernible relation between average speed and the fatality rate, though they do show a significant relationship between speed‐variance and the fatality rate. Given this result, we want to know the relationship between the 55 mph limit and speed variance. There is weak evidence that this critical relationship is negative—raising the speed limit a small amount might actually decrease the dispersion of highway speeds.

Whatever the benefits of the 55 limit, its costs are important. On the rural interstate highways it costs about 250 years of extra driving time to save one life. And the policing resources spent on enforcing the 55 mph limit would save more lives if they were allocated to other highway safety measures.     

Are Longer and Heavier Vehicles (LHVs) Beneficial for Society? A Cost Benefit Analysis to Evaluate their Potential Implementation in Spain

Abstract

In this paper we carry out a thorough review of the current research related to the benefits and costs arising from the implementation of longer and heavier vehicles (LHVs). From this review we concluded that despite the many studies available, little has been said about the sensitivity of the benefits and costs to the ultimate performance of the key variables related to the evolution of the economy, road transport performance, safety, and so on. In order to fill this gap, we have designed a sensitivity approach based on a cost benefit analysis tool to determine which variables demonstrate the greatest influence on the benefits and costs stemming from the implementation of LHVs. In order to test the methodology, we have used it in an analysis of the Spanish trunk network. The results show that the benefits of LHVs for society are significant. Even in the least favorable scenario, the economic benefits are greater than €3500 million over 15 years, and the environment enhanced as well, for CO₂ emissions are reduced by 2 Million tonnes. Overall we noted how the results are not very sensitive to the evolution of key variables in determining the final outcome. However, we found that the variables that have the greatest affect on the final benefit, such as traffic growth and social discount rate, depend basically on the performance of the overall economy. Moreover, the private cost for haulers seems to be more important in determining the final benefit than externality costs.     

Review of Road Hauliers' Measures for Increasing Transport Efficiency and Sustainability in Urban Freight Distribution

This paper analyses a set of measures for transport efficiency improvements from the perspective of the road haulier, particularly regarding improvements suitable for urban distribution and their effects. The first part of the paper addresses literature within the area of transport efficiency. The second part reviews potential transport efficiency improvements with respect to environmental impact and the number of actors involved in the decision. The third part presents results from interviews with the CEOs of two road hauliers regarding their opinions of the transport efficiency measures. Finally, the conclusions about transport efficiency measures are summarized in a matrix, taking into account whether these measures can be considered as costs or benefits for the actors involved. The results show ambiguous and often intricate relations with regard to costs and benefits for the actors in the system. They also explain part of the inertia to change within the freight industry. However, an increasing number of transport operators are now offering more sustainable transport solutions and this service might gain them a competitive advantage in the future.     

The sensitivity of optimal transport strategies to specification of objectives

This paper describes a method for devising transport strategies that makes iterative use of transport models to find the optimal levels of pre-defined transport measures. It gives the results from using this method in nine European cities. At the heart of the procedure lies the definition of objective functions which encapsulate policy-makers' objectives with respect to economic efficiency and sustainability. These objective functions include a number of significant parameters and the paper examines the sensitivity of the results to changes in the values of these parameters. The parameters concerned are: the level of shadow price used with regard to public sector financial surplus and deficit; the trade-off between the perspectives of the present generation and a future generation (of importance to issues of sustainability); the trade-off between internal benefits/costs and external (environmental) benefits/costs; and the level of user benefits that can be “value captured” in the sense of raising additional finance for transport policies. Full sets of results are given for these sensitivity tests, and a number of practical transport policy conclusions are made.     

Substance precedes methodology: on cost–benefit analysis and equity

While distributive aspects have been a topic of discussion in relation to cost–benefit analysis (CBA), little systematic thought has been given in the CBA literature to the focus of such an equity analysis in evaluating transport projects. The goal of the paper is to provide an overview of the various directions an equity analysis, carried out within the context of a social cost–benefit analysis, could take. The paper starts from the widely-shared definition of distributive justice: the morally proper distribution of goods and bads over members of society. Following this definition, carrying out an equity analysis requires that decisions are made about: (1) the benefits and costs that are distributed through a transport project; (2) the members of society between whom benefits and costs are distributed; and (3) the distributive principle that determines whether a particular distribution is fair. Much of the discussions about cost–benefit analysis and equity do not address these questions in any systematic way. The paper aims to provide a framework. Three sets of benefits and costs are identified as a possible focus of an equity analysis: (1) net benefits; (2) mobility-enhancing benefits; and (3) individual benefits and costs. For each set, a discussion follows regarding the way in which members of societies could be divided into meaningful groups, as well as the possible yardstick for judging whether a certain distribution is fair. While the paper acknowledges that the choice between the three sets is ultimately a political decision, it ends with a set of arguments that suggest that the equity analysis of transport projects should focus first and foremost on the mobility-enhancing benefits generated by such projects.     

Does uncertainty make cost-benefit analyses pointless?

Cost-benefit analysis (CBA) is widely used in public decision making on infrastructure investments. However, the demand forecasts, cost estimates, benefit valuations and effect assessments that are conducted as part of CBAs are all subject to various degrees of uncertainty. The question is to what extent CBAs, given such uncertainties, are still useful as a way to prioritize between infrastructure investments, or put differently, how robust the policy conclusions of CBA are with respect to uncertainties. Using simulations based on real data on national infrastructure plans in Sweden and Norway, we study how investment selection and total realized benefits change when decisions are based on CBA assessments subject to several different types of uncertainty. Our results indicate that realized benefits and investment selection are surprisingly insensitive to all studied types of uncertainty, even for high levels of uncertainty. The two types of uncertainty that affect results the most are uncertainties about investment cost and transport demand. Provided that decisions are based on CBA outcomes, reducing uncertainty is still worthwhile, however, because of the huge sums at stake. Even moderate reductions of uncertainties about unit values, investment costs, future demand and project effects may increase the realized benefits infrastructure investment plans by tens or hundreds of million euros. We conclude that, despite the many types of uncertainties, CBA is able to fairly consistently separate the wheat from the chaff and hence contribute to substantially improved infrastructure decisions.     

An advanced traveler general information system for Fresno,California

This study estimates the effects of an advanced traveler general information system (ATGIS), which includes fuel consumption and health-related emissions cost information on transportation network users’ travel choice behavior for recurrent congestion conditions. The effects are estimated using four different formulations based on four different behavioral assumptions. Incorporating stochastic features in link cost estimation rather than in route choice, we provide a novel modeling approach that enables us to use transportation planning models of major metropolitan areas without a need for major computationally-expensive changes in the existing models. We examined the effects of an ATGIS on the Fresno, CA, road network and found several interesting results. First, the ATGIS impact is closely related to pre-system (prior to the implementation of an ATGIS) perceived fuel and emissions costs. Total travel time in the city can be reduced by 17% (no pre-system perceived costs) to 1% (accurate pre-system perceived costs), and even increased by 1% (higher-than-actual pre-system perceived costs). Second, the addition of emissions costs, although negligible relative to fuel and time costs, can effectively reduce total system-wide travel time by up to 1% and fuel consumption by up to 0.6% during peak hours. Third, the ATGIS can reduce annual social costs by as much as $1053 million (high gas price, no pre-system perception) to $48 million (medium gas price, accurate pre-system perception), which are comparable to social cost savings by a congestion pricing (CP) scheme in the study area.     

Effect of advanced traveler information systems and road pricing in a network with non-recurrent congestion

The effect of the application of advanced transport information system (ATIS) and road pricing is studied in a transportation system under non-recurrent congestion. A stochastic network deterministic user equilibrium model (SNDUE) with elastic demand is formulated and used to evaluate the welfare and private impacts of different market penetrations of ATIS, together with road pricing for a simple network. Both marginal first-best road pricing and a second-best fixed road pricing are considered. The incentives of private users to use ATIS are analyzed and the characteristics of optimum tolls as a function of ATIS market penetration are shown. We conclude that ATIS is an efficient and necessary tool to reduce the effects of non-recurrent incidents in a transportation network, especially when non-recurrent congestion causes a significant deterioration of operational conditions of the network. If the impact of non-recurrent incidents on free flow costs is small or is reduced only to congestion effects, the use of road pricing would be more efficient. Social benefits obtained when jointly implementing ATIS and road pricing are practically the same whether first-best or second-best road pricing is used. Considering the private costs perceived by the network users, and the benefits experienced by equipped users, the maximum level of market penetration achieved could be limited because private benefits disappear after certain market penetration is obtained.