Cost benefit computation

Last year (2008) an agency in Michigan calculated a cost of $18,000 to $25,000 per mile for installation using a County sign installation crew. I made an estimate for installing 265 reflectors and it is in the table below. I tried to be conservative (on the high side) and you can add or subtract as needed.

Materials (reflectors, posts, hardware, traffic control signs)

$17,870

Labor (two-person crew)

$2,385

Equipment (small truck, post driver)
$1,325

The total is $21,580 so the cost per reflector was $81.

In terms of cost benefit, the average cost for damage to vehicles per car deer crash is about $2,500. I experienced 75 to 95% reduction in my County so if we use a 75%, again to be conservative the numbers look like this:

◦ If we have a one mile section.

◦ If we have an average of 10 car deer crashes per mile per year on the section.

◦ If we install the delineators for the cost of $21,580

◦ If we experience a reduction of 70% (eliminate 7 crashes per year)

Then, we eliminate car damage of 7 x $2,500 = $17,500 each year.

If we divide installation cost by annual car damage saving we have $21,580 / $17,500 = 1.23 years for payback. In other words, the installation costs are paid back by crash damage cost savings in 1.23 years. This is a very quick and reasonable rate of return in the traffic engineering business.　

If we eliminate only 30% (3 crashes per year) we still get $21,580 / (3 x 2,500) = $21,580/ $7,500) = 2.88 years for payback. In other words, the installation costs are paid back by crash damage cost savings in about 3 years. This is a typical payback period for safety projects.

Dennis Randolph
Managing Director/County Highway Engineer
Calhoun County Road Commission
Marshall, Michigan
April 7, 2009