What planning objectives is the project intended to achieve? What impacts should be considered in economic analysis?
Transportation planning tends to have multiple objectives, which usually include:
Traffic congestion reductions
Parking cost savings
Consumer savings and affordability (savings to lower-income households)
Improved mobility for non-drivers
Improved safety
Energy conservation
Air, noise and water pollution reductions
Habitat protection
Support for local economic development
Improved public fitness and health (from increased walking and cycling)
Although a project may have one primary objective, such as reducing congestion or improving mobility for non-drivers, transportation agencies should generally try to maximize social benefits by selecting projects that help achieve multiple planning objectives. For example, when evaluating various congestion reduction options it is desirable to select those that also help reduce parking costs, improve mobility for non-drivers, and increase safety. Conversely, when evaluating transportation energy conservation strategies it is best to choose those that also reduce traffic and parking congestion.
As much as possible, all significant impacts (benefits and costs) should be considered in economic analysis. Many impacts can be quantified and monetized (measured in monetary values), using methods described in this website, and so can be incorporated into benefit-cost analysis. Others may be unsuited for monetization, but should still be described and quantified as much as possible (for example, by estimating the acres of wildlife habitat that will be impacted, or the number of non-drivers who will benefit from improved mobility options) so they can be effectively considered in the planning process.
Project: Straightening a curve in a road
Purpose: To reduce accidents
Unintended effects: Reduced travel time
Benefits: Reduced accidents and travel time
Project: New bus route
Purpose: To provide mobility for transit-dependent people
Unintended effects: Reduced automobile trips, bus noise on new route, people waiting at new bus stops
Benefits: Increased person-trips, reduced automobile congestion and noise, noise from buses (a negative benefit), effects on property adjacent to bus stops (these effects may or may not be significant and may be negative or positive -- people trampling a lawn and dropping trash or people patronizing an adjacent neighborhood store)
Project: Changeable message signs on a congested freeway providing travel time via an alternate route
Purposes: To reduce overall delay by encouraging alternate routes, to reduce travel time uncertainty
Unintended effects: Increased delay on alternate routes and connecting streets
Benefits: Reduced overall travel time on freeway, increased overall travel time on alternate routes and connecting streets (negative benefits).
These will depend on the perspective of the sponsoring agency. A city may wish to consider only the benefits and costs that accrue to city residents. A federal agency, allocating funds for new transit starts, is likely to consider the costs and benefits to all involved. A large state, such as California, with significant manufacturing and trade, may consider benefits and costs to all parties in prioritizing highway projects, while a small state, with substantial through traffic that does not substantially benefit its economy, may desire to focus only on the costs and benefits to the state's residents and businesses. This tendency to take a parochial view is a potential pitfall in that, when applied properly, benefit-cost analysis should be broad enough to consider all persons who incur significicant costs or benefits.
The term "unintended effects" is used to focus attention on a project's foreseeable side effects that may be either good or bad. These are important in evaluating and gaining support for projects. For example, a project that is effective in reducing automobile congestion may make pedestrian or bicycle travel more dangerous, while an alternative that is somewhat less effective in reducing automobile congestion may not reduce pedestrian safety and may thus have greater overall benefits. In the bus route example above, awareness that bus stops affect adjacent property may result in locating stops so as to minimize damage.
Steve Abley, Paul Durdin and Malcolm Douglass (2010), Integrated Transport Assessment Guidelines, Report 422, Land Transport New Zealand (www.nzta.govt.nz); atwww.nzta.govt.nz/resources/research/reports/422.
CH2M Hill and HDR (2010), History and Application of Least Cost Planning for Transportation from the Mid-1990s, Oregon Department of Transportation (www.oregon.gov); at www.oregon.gov/ODOT/TD/TP/LCP.shtml.
DfT (2006), Transport Analysis Guidance: Integrated Transport Economics and Appraisal, Department for Transport (www.webtag.org.uk/index.htm).
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Todd Litman (2005), Win-Win Transportation Solutions: Cooperation for Economic, Social and Environmental Benefits, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/winwin.pdf; originally published as “Transportation Demand Management and ‘Win-Win’ Transportation Solutions” Handbook of Transport and the Environment, Elsevier, 2003.
Todd Litman (2008), Comprehensive Transport Planning: Best Practices For Evaluating All Options And Impacts, VTPI (www.vtpi.org); at www.vtpi.org/comprehensive.pdf.
NZTA (2010), Economic Evaluation Manual, Volumes 1 and 2, New Zealand Transport Agency (www.nzta.govt.nz); at www.nzta.govt.nz/resources/economic-evaluation-manual/volume-1/index.html and www.nzta.govt.nz/resources/economic-evaluation-manual/volume-2/docs/eem2-july-2010.pdf.
VTPI (2010), Online TDM Encyclopedia, Victoria Transport Policy Institute (www.vtpi.org/trb).
WSDOT (2009), Least Cost Planning Guidance, Washington State Department of Transportation (www.wadot.wa.gov); at wadot.wa.gov/NR/rdonlyres/FDBC2704-7998-49D9-9F70-B16F5D1A0B2E/0/LeastCostPlanningexampledefinitionsfordiscussion.pdf.