1. Economic Analysis in Transportation Systems Tapan K. Datta, Ph.D., P.E. CE 7640: Fall 2002

2. Chapter 11: Road User Consequences  Market Factors: 1. Operating cost of motor vehicle 2. Reduction in highway accidents 3. Reduction in travel time  Non-Market Factors 1. Personal preference 2. Comfort 3. Convenience 4. Lessening of travel strain

3. Road User Consequences  There are both positive and negative consequences  Non-Road user consequences: - Pollution - Noise  When you improve a road 2 lanes to 5 lanes: - Run off characteristics change - Wetland characteristics change

4.  Non-road user consequences can be more severe than that of the user consequences  For any major project it is required to provide the Environmental Impact Statement (EIS) Road User Consequences

5. 1. Benefits to the users due to travel time savings 2. Expected travel time varies widely between person to person Delay = Expected TT – Actual TT Benefits = Reduction in TT where, TT = Travel Time Road User Consequences

6. Reduction in TT = Actual TT Before improvements – Actual TT After improvements  Suppose you have a road widening project Alternatives: 1. Project A: Do Nothing 2. Project B: Widening of Intersections 3. Project C: Continuous widening Road User Consequences

7. Demand Modeling Will Tell You  Trip Generation  Traffic Assignment Models: Will tell you how much traffic is assigned for each link  Capacity Restrained Model  Planning Horizon: Service life of the improvement  Note that we do not design based on the existing situation.

8. To find the Road User Consequences  You can use the Highway Capacity Software (HCS)  To find delay estimates you can use the Highway Capacity Analysis.

9. Travel Time Saved  Time cannot be bought or sold.  We buy or sell what is accomplished over a span of time.  Value of Time = Value of the products produced or services gained during the passage of time.  When TT is less, no time is actually saved. We just have different use of the time.

10. Factors Related to Value of TT A. Persons in Auto  Age  Number  Occupation  Earning  Whether paid during time of travel

11. Factors Related to Value of TT B. The Trip  Distance  Number of stops  Trip purpose - Work trip - Recreational trip - Others  Regularity and frequency of the trip  Total travel time  Who pays for the trip

12. Factors Related to Value of TT C. Environmental Factors  Day of week  Hour of day  Season of year  Land use  Speed of travel

13. Factors Related to Value of TT D. Factors of Value  Activity just before the trip  Activity end of the trip  Amount of time available  Time when trip begins and ends  Utilization and reduction in travel time Note All economic reports must include well documented assumptions and benefits that are intangible

14. Toll Roads vs. Free Roads  Toll road came in 50’s  Pay as you go concept  The objective was demand control: so that you will have comfortable travel  Claffey Study: - Price charged is for reduced TT and better ride - Suppose speed change of 1 mph = 0.048 cents this is what a traveler is willing to pay to reduce travel time

15. Haney and Thomas  Developed a model for passenger car travel time based on field studies of commuter travel of work trip  $ 2.82/Hr. (In 1966-1967).  This is a special value not a generalized value of time.

16. Haney and Thomas Study- The Price was Based on: 1. Commuter work trips by employed persons 2. Work trips > 10 minutes 3. Work trips > 5 miles 4. Annual income $ 6000 to $ 8000 per year 5. No separate value for traffic impedances (vehicles in congestion). 6. Value of time reduction was not added to reduction in vehicle running costs.

17. Lisco Study  Compared passenger car driving to rail rapid transit travel in Chicago area.  Skokie to the loop in Chicago  TT cost = $2.5 to $2.7/hr.  He used commuter interviews and field driving tests  His model used regression analysis

18. The Factors Included: 1. Travel time differential 2. Driving cost differential 3. Two factors related to whether the family spouse works and drives to work 4. Household income restraint 5. Gender variable 6. Age variable 7. Mode choice In addition to $2.50 to $2.70 of commuter TT, Lisco computed $1.5 to $2.5/day for comfort and convenience.

19. Running Cost of Passenger Cars Table 11-1 P. 271

20.  At 40 mph running cost  4 cents per mile = $1.6/veh- hr.  At 70 mph, running cost  5.3 cents per mile = $3.67/veh- hr.  When we relate increase in vehicle running costs to decrease in travel time,  This cost per hour of travel time reduction varies  $.07 at 36 mph to $9,75 at 80 mph.  $.07 cost of travel time reduction at 36 mph as compared to 35 mph.

21. Other Time Factors  Does all the same classification of vehicles on a highway have the same value in $/hr.?  For example, 1200 vehicle-seconds of travel time reduction  It can be 120 cars at 10 seconds each OR  1 car experiencing 120 seconds of travel time reduction  Are they the same in value?

22. Commercial Vehicle Travel Time  Value of travel time for commercial vehicles can be established on a much firmer basis than passenger cars  Cost of TT for commercial traffic is more than that for regular traffic  40 mph: 4 cents/mile $1.6/Veh-hr.  70 mph: 5.3 cents/mile $3.67/Veh-hr.  Never see the same class of vehicles on a highway

23.  Value of travel time for commercial vehicle drivers get similar wages.  Commercial vehicle TT value = Wages of drivers. This assumption ignores several things: 1. Consideration of vehicle use 2. Type of cargo 3. Overall profitability Commercial Vehicle Travel Time

24. $/Hr. of TT for Commercial Vehicles Table 11-2 P. 274

25. Highway Cost to Reduce Passenger Car Travel Time  The cost of passenger car TT = Net cost of highway improvement – Cost of road user benefits – Commercial vehicle travel time values  Cost of passenger car TT reduction will be negative for projects in which the total dollar value of net benefits from automobile running costs, accidents, and commercial vehicle TT reduction exceeds EUAC.

26. Personal Preference Satisfaction: Comfort and Convenience Each driver has their preference and what constitutes comfort and convenience A. Items of Physical Comfort  Minimum steering  Eye comfort: -no headlight glare  Minimum acceleration and deceleration  Smooth pavement  Relaxed driving

27. B. Items of Mental Comfort  Pleasing roadside view  Quiet travel  Minimum change of direction and speed  Good signing  Free speed  Reliable travel time  Uniform geometric design Personal Preference Satisfaction: Comfort and Convenience

28. C. Items of Convenience  Minimum Steering  Minimum speed change  Directness of travel to destination  Minimum route change and direction change  Freedom of movement Personal Preference Satisfaction: Comfort and Convenience

29. D. Factors Producing Tension and Discomfort  Hazard condition  Uncertain motorists behavior  Narrow roads  Lack of information  Information overload. Personal Preference Satisfaction: Comfort and Convenience

30. E. Items of Impedance to Uniform Speed  Congestion  Stops and slow downs  High traffic volume  Frequent turning from roadside developments Personal Preference Satisfaction: Comfort and Convenience

31. Chapter 13: Vehicle Costs and the Highway A.Highway 1.Distance traveled 2.Roadway geometry Grade Alignment 3.Road surface Concrete Asphalt Gravel Factors Affecting Running Costs

32. A.Highway (continued) 4.Traffic Volume Composition Density Speed 5.Traffic controls Stop signs Signals 6.Legal restraints 1. Speed limit Factors Affecting Running Costs

33. B.Vehicle 1.Weight (Gross) 2.Weight to HP ratio 3.Transmission and rear axle ratios 4.Tire size and pressure 5.Vehicle size 6.Mechanical condition 7.Type of fuel Factors Affecting Running Costs

34. C.Operator 1.Speed change rate and frequency 2.Cruise speed 3.Trip length 4.Care of vehicle D.Weather and Topography 1.Air temperature, pressure and humidity 2.Wind direction and Velocity 3.Rain, snow, ice 4.Altitude and topography Factors Affecting Running Costs

35. Car rental companies Operating cost of cars Sources of Records

36. Fuel Consumption Vehicle Weight Tire Body Size Engine design Power transmission Highway Driver Weather and Altitude Factors of Running Costs of Auto

37. Tire wear Driver Road surface Engine oil consumption Coolant temperature Ignition timing Manifold pressure RPM Factors of Running Costs of Auto (Continued)

38. Vehicle Maintenance Preventive Vehicle Depreciation Factors of Running Costs of Auto (Continued)

39. No.Vehicle Type Percent Available % Avg. Purchase Price ($) Avg. MPG Salvage Value ($) 1Sub Compact Cars515,000353,000 2Comapct Cars1018,000303,600 3Mid. Size Cars2020,000254,000 4Full Size Cars1526,000205,200 5Mini Vans1522,000204,400 6SUV2025,000185,000 7Large Vans525,000155,000 8Pick Up Trucks1015,000203,000 Total100 % Cost of Owning A Vehicle

40. Example  Service Life = 8 years  Salvage Value = 20% of Purchase Price  Vestcharge rate = 7%  Average Annual Use = 12,000 miles/year  Gas Price = $1.40/Gallon  Assume Other Operating Costs

41. Calculate the Best Strategy for Owning a Vehicle for an Average Citizen (a) You use it to go to work and other trips (b) You use your car 20,000 miles/year, and use it for normal use (c) You use 15,000 miles for your use and 5,000 miles for company use per year.

42. General Assumptions for the Three Cases

43. (a) You use it to go to work and other trips (12,000 miles/year) Assumptions:  Oil Change and Lube = $80/year  Maintenance Cost = $3,200 in 8 years  Parking Cost = $360/year  Registration Cost = $100/year  Insurance Cost = $1,200/year

44. Calculations  Take the first Vehicle type (Purchase cost = $15,000) 1. Depreciation Cost Depreciable Amount = 15,000 – 3,000 = $12,000 Dep. Cost/mile = 12,000/96,000 = $0.125/mile

45. 2. Financing Cost FW = Future worth of the purchase price P FW = 15,000 (CA).07 8 FW = 15,000 (1.71818618) = $25,772.80 Cost of Financing = 25,772.80 – 15,000 = $ 10,772.80 in 8 years  Cost per mile = 10,772.80/96,000 = $0.112/mile Calculations (Continued)

46. 3. Gas Cost Given: 35 mile/Gal. and Price of Gas = $1.40/Gal. Cost/mile = 1.4/35 = $0.040/mile Calculations (Continued)

47. 4. Oil and Lube Assume oil change every 3000 miles Cost per change = $20 Cost per mile = 20*4/12,000 = $0.0067/mile Calculations (Continued)

48. 5. Maintenance Cost $3,200 in 8 years Cost per mile = 3,200/96,000 = $0.033/mile Calculations (Continued)

49. 6. Parking Cost $360 per year Cost Per Mile = 360/12000 = $0.030/mile Calculations (Continued)

50. 7. Registration Cost $100/year Cost per mile = 100/12000 = $0.008/mile Calculations (Continued)

51. 8. Insurance Cost $1,200 per year in average of 8 years Cost per mile = 1,200/12,000 = $0.100/mile Calculations (Continued)

52. (a) 12,000 Miles per Year

53. (b) You use your car 20,000 miles/year, and use it for normal use Assumptions:  Oil Change and Lube = $180/year  Maintenance Cost = $3,200 in 8 years  Parking Cost = $360/year  Registration Cost = $100/year  Insurance Cost = $1,500/year

54. (b) You use your car 20,000 miles/year, and use it for normal use

55. (c) You use 15,000 miles for your use and 5,000 miles for company use per year. Assumptions  Oil Change and Lube = $180/year  Maintenance Cost = $3,200 in 8 years  Parking Cost = $360/year  Registration Cost = $100/year  Insurance Cost = $1,500/year  Your Company pays you $0.32/mile for each mile you drive your car for work purposes

56. Case (c) (Continued) For the 5,000 miles used for work purposes you will get 5000*0.32 = $ 1,600/year Total savings per mile = 1,600/20,000 = $ 0.08/mile

57. (c) You use 15,000 miles for your use and 5,000 miles for company use per year.

58. Determine the cost of owning your vehicle in dollars per mile. Homework #5