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3rd Edition, September 1, 2010

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General Purpose

There are many different types of benefits related to transportation improvements. Part One of this manual focuses on user benefits, or benefits that are enjoyed by travelers that are directly affected by a transportation improvement. User benefits are determined by travel costs in three distinct areas: travel time costs, operating costs, and accident costs. Taken together, the total of these costs is essentially the price that travelers must pay to travel. When a comparison is made between the costs of traveling and the number of trips taken at each price level, a relationship is determined between the cost of travel and the demand for trips. When all users are aggregated together, the difference between the travel "price" that travelers are required to pay and what they would have been willing to pay is the user benefit affiliated with the trip. Any reduction in travel costs (i.e., trip price), then, will result in a benefit to the traveler. For example, with a cost reduction, users who were already making the trip receive the benefit of making the same trip at a lower cost.

Focusing first on user benefits is appropriate because most of the economic benefits of transportation projects come from the reduction in user costs. When trips in a particular corridor are perceived as costly, perhaps due to long travel times or high accident rates, travelers sacrifice taking some trips in that corridor, and the economic activity associated with those trips is lost. Reducing user costs makes the perceived cost of travel cheaper, and facilitates trip making and the accompanying economic activities. By balancing these accompanying user benefits against project costs, we can determine which projects will provide the optimal level of net benefits to society.

Obviously, however, a project will also impact people other than direct users of the facility. These effects are referred to as indirect benefits or non-user benefits. Examples of indirect benefits include environmental impacts, effects on urban growth, economic influences, and the distribution of costs and benefits attached with the project. The methods for measuring non-user benefits are different in some ways from the methods used to measure user benefits. To facilitate exposition of those differences, non-user benefit measurement is discussed in Part 2 of this manual, beginning at Chapter 8.

Regardless of whether one examines a project's benefits from the user or non-user perspective, the general framework for measuring project benefits is similar. Project benefit estimation requires that each project being evaluated be compared against some alternative outcome. The alternative outcome could be a "Base Case" or "No-Build Scenario" that maintains current facility conditions into the future. The alternative scenario could also be a different improvement project. In either case, to conduct the project benefit analysis, benefit levels are estimated for two different scenarios. When measuring user benefits, for example, the difference in user costs (that is, the combined effect on user benefits due to changes in travel costs, operating costs, and accident costs) is the impact to the users linked to the project. Since an improvement should result in a reduction in these costs, the difference in these cost levels is used to determine the total user benefit of the project. Measurement of non-user benefits also requires a comparison of the project outcome with some alternative outcome. The non-user project benefits are also measured as the difference of the two outcomes.