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Engineering economics and finance for transportation infrastructure
Transportation planners and engineers often feel unfamiliar with economic principles, and some assume that economics does not apply to their job duties. In practice, most transportation professionals can regularly employ economic concepts and techniques for decision-making?and many do, albeit unconsciously. Due to a variety of time and data constraints, many transportation practitioners? decision-making processes are not formally documented and emerge via ?engineering judgment.? However casual in nature, the wisdom behind such judgment comes from past experiences and is rooted in economic considerations and consequences. In fact, many rules of thumb for transportation investment and policy arose from economic backgrounds. Consider this example: due to pavement aging and regular use, many farm-to-market (FM) roads are in need of rehabilitation or reconstruction. Should TxDOT districts install more expensive but longer lasting concrete pavements or rely on less expensive asphalt overlays? The rule of thumb is to go with asphalt, for a variety of reasons, but a definitive answer is not simple. If strict near-term budget constraints did not exist, the decision presumably would be based on a lifecycle cost analysis, used to reveal the solution that yields the lowest annual equivalent cost or maximum net present benefit over a long-term horizon, reflecting risk and uncertainty in flow volumes, materials prices, vehicle sizes, and other economic indicators. In the face of tight budgets, immediate tradeoffs loom. Asphalt pavements may be favored simply to ensure a consistent level of pavement quality across the district under limited funding conditions, while emphasizing equity in funds disbursement?thus covering more funding requests in a given year. However, if certain FM roads carry significantly more truck traffic, and some are in areas with high levels of black clay (which causes premature distress on asphalt pavement and so requires higher maintenance costs), should these roads be candidates for concrete pavements? What if such a consideration requires some lighter-traffic roads to be maintained less frequently? What is the cost passed onto the users of the lighter-traffic roads who may experience slower travel times and increased vehicle repair and maintenance costs? This common topic is rife with economic considerations. Fortunately, a wide variety of tools is available to help transportation professionals address these common but fundamentally complex questions with more confidence than a rule of thumb offers. All of the following questions also apply. Have you ever had to ponder one or more of these? ? How much should contractors be charged for project schedule delays? ? How should DOTs prioritize capacity-expansion, maintenance, and operations projects? ? With limited funding, should DOTs focus on implementing multiple smaller projects, or allocate a significant amount to relatively few larger projects? ? Should a new highway include or exclude frontage roads? What are the monetary and other costs associated with constructing these frontage roads relative to the benefits they provide? Introduction I-2 ? Should right-of-way (ROW) acquisition for a new-build project include room for a future passenger rail corridor (or other future connecting facilities)? What is the likelihood of rail implementation (or construction of future connections) compared to the uncertainty of future ROW acquisition cost? ? Should a speed limit be raised (to save travel time) or lowered (to guard against severe crashes and increase energy efficiency)? What speed changes (and times savings) can we expect from drivers, and how do all costs and benefits compare? ? If adding a relief route attracts new development (e.g., a big-box retailer) to the bypass frontage, but the competition closes several smaller shops in the city?s historic downtown, what is the overall economic impact to the city? And to the region? ? What is better for DOT budgets, the environment, and travelers: gas taxes, vehicle-milestravelled (VMT) fees, or tolls by time of day and location? These are just a few of the questions where successful solutions are improved by an economic understanding. This Reference is designed to introduce transportation practitioners to the underlying economic realities of their profession. Ultimately, good engineering judgment, which is vital to defensible and optimal decision-making, relies in large part on good economic judgment. Economics as a Tool for Transportation Decision-making From travel time savings to job creation (both direct and indirect), income growth to property value changes, motor vehicle crashes to air quality and noise impacts, and microeconomic choices to macroeconomic shifts, transportation policies and investments carry great weight. Where formally assembled data is available, economic analysis tools allow decision-makers to comprehensively evaluate projects. For large projects with significant costs and many others closely scrutinized by the public, practitioners feel more confident about decisions with ?numbers to back them up.? Even when data are lacking and/or decision impacts are minor, a basic understanding of various economic principles will aid transportation professionals in anticipating the direction and general magnitude of project (and policy) effects. Such understanding helps identify key project impacts and leads to more educated and robust decisionmaking. An understanding of current and future data needs also helps engineers and planners identify?and remedy?important data limitations for enhancements in future decision-making. For example, unsafe curves on two-lane highways with high fatality rates can be prioritized on the basis of these crashes? very high economic and social costs, as discussed in Chapter 1, Costs and Benefits of Transportation. And the geo-coding of network design databases (such as TxDOT?s RHiNo and GeoHiNi files) can be prioritized to better map to police-report crash information systems, ensuring more accurate crash counts by segment for statistical regression applications (as discussed in Chapter 8, Econometrics for Data Analysis.) An additional motivation for DOT staff to become familiar with economic analysis tools is the trend of evolving federal mandates that require economic impact analysis and comprehensive quantification of transportation costs and benefits. For example, the USDOT Transportation Investment Generating Economic Recovery (TIGER) Discretionary Grant Program required that applicants monetize project benefits in the categories of livability, economic competitiveness, I-3 Introduction safety, state of good repair, and sustainability (as discussed in Chapter 5, Investment and Financing). Such mandates will motivate agency staff to understand and apply economic techniques in order to pursue funding through various federal channels. Even if such analyses are not performed in-house, an understanding of basic economic analysis principles helps staff members critically review outsourced analyses and more appropriately guide consultants? activities. This Reference seeks to enable such understanding while enhancing a wide variety of DOT staff activities. Following is a sneak preview of key concepts covered.
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| Tan 658. 404 Pra e | PSB lt.dasar - Pascasarjana | 1 |
| Penerbit | New York Springer., 2013 |
|---|---|
| Edisi | - |
| Subjek | Engineering economics Transportation economics |
| ISBN/ISSN | 9783642385797 |
| Klasifikasi | NONE |
| Deskripsi Fisik | - |
| Info Detail Spesifik | - |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas | Tidak Ada Data |