Valuation of road projects with uncertain outcomes

This is a practical implementation of a multicriteria methodology developed to assess the risk involved in investment or policy projects. It is based on the specification of a non-linear, but piecewise linear, additive utility function, where the partial utility functions are specified as recursive exponential functions of only one curvature parameter. This allows for a reduction of the quantity of information necessary to build the utility function in a context of uncertainty. It is introduced in an aggregation model whereby the partial utility functions are built separately through a specific questioning process. The methodology is applied to the selection of road infrastructure projects of the Walloon Region in Belgium with several experts and civil servants from the Transport Ministry whose individual utility functions are derived. Software called MUSTARD is used, which stepwise and interactively helps the decision-makers to formulate the problem, build the criteria's distributions and state their preferences. The projects are ranked according to their rate of return computed on the basis of the projects' certain equivalent money values.