Transportation Cost and Benefit Analysis
Techniques, Estimates and Implications
[Second Edition]

Updated January 2009

Welcome to Transportation Cost and Benefit Analysis: Techniques, Estimates and Implications, a guidebook for quantifying the full costs and benefits of different transportation modes. This 500-page+ document is a comprehensive study of transportation benefit and costing research, and a guidebook for applying this information in planning and policy analysis.

This document is unique in several important ways. It is one of the most comprehensive studies of its type, including many categories of costs and benefits that are often overlooked, and the only one that is regularly expanded and updated as new information becomes available. It provides extensive reference information, mostly available through the Internet, allowing users to obtain additional information when needed. It explains economic evaluation techniques and how to apply them. It is the only study that provides costs values in a format designed to easily calculate the full costs and benefits of transportation policy and planning alternatives.

Individual chapters include detailed information on various categories of transportation costs and benefits, including summaries of previous monetized estimates. Using the best available data, it provides monetized estimates of twenty costs for eleven travel modes under three travel conditions. Costs are categorized according to various attributes: whether they are internal or external, fixed or variable, market or nonmarket. Examples illustrate how this information can be applied for transportation policy and planning decisions.

The Guidebook also summarizes previous transportation impact studies, describes how nonmarket impacts are estimated, discusses major findings, evaluates criticisms of transportation costing, and explores implications and applications of this research.

We regularly update and revise the Guidebook. Please let us know if you have comments or suggestions for improving this information.


  Executive Summary This is a short, 7-page summary of this guidebook.
1. Introduction This chapter describes the context and scope of this guidebook, the value of measuring transportation costs, defines and discusses the concepts of “transport” and “cost,” and categorizes costs based on various attributes.
2. Literature Review This chapter reviews various studies of the full costs of transportation, covering both personal and freight transport costs.
3. Economic Evaluation This chapter describes basic economic evaluation principles and techniques, and how they relate to transportation cost analysis. It discusses evaluation of optimal pricing, project investment and policy analysis, and transportation equity.
4. Cost Quantification Techniques This chapter describes various techniques for quantifying and monetizing (measuring in monetary units) transportation impacts.
5.0 Costs – Overview and Definitions This chapter describes the information that is included in each of the cost chapters and defines the modes that are considered.
5.1 Vehicle Costs This chapter examines direct user financial costs for vehicles, transit fares and telework equipment.
5.2 Travel Time This chapter examines the value of travel time and travel time savings. It describes various estimates of travel time values for different user types and travel conditions.
5.3 Safety and Health This chapter examines the safety and health impacts of transportation activities, including crash damages, personal security and public health. It describes how these impacts are measured, how they vary by mode and travel conditions, and how they are distributed.
5.4 Parking This chapter explores the costs of providing parking facilities. It estimates the costs of different types of parking spaces and the number of parking spaces per vehicle. It discusses the distribution of parking costs.
5.5 Congestion This chapter examines traffic congestion costs, that is, delay and risk due to interference between road users. It describes how congestion is measured, factors that affect congestion, various estimates of congestion costs, and the benefits of congestion reductions.
5.6 Roadway Facilities This chapter examines public expenditures on roadway facilities. It describes roadway construction, maintenance and operating costs, and how those costs are allocated to different types of vehicles.
5.7 Roadway Land Value This chapter investigates the amount of land devoted to roads, the value of this land, and how this cost can be allocated to road users.
5.8 Traffic Services This chapter explores the costs of public services for vehicle traffic, including law enforcement, emergency services and street lighting.
5.9 Transportation Diversity This chapter explores the value of transportation diversity and the costs of reduced transport options. Transportation diversity provides efficiency, equity, option value and resilience benefits.
5.10 Air Pollution This chapter describes vehicle air pollutants, how emissions of different vehicles can be quantified, factors that affect emission rates, and the costs of vehicle air pollution.
5.11 Noise This chapter provides information on vehicle noise costs, including general information on how noise is quantified, the noise emissions of various types of vehicles, and estimates of their noise costs.
5.12 Resource Consumption This chapter describes the external costs of resource consumption (particularly petroleum and other forms of energy), and therefore the benefits of conservation and increased efficiency.
5.13 Barrier Effect This chapter describes the barrier effect (also called “severance”), which refers to delays that roads and traffic cause to nonmotorized travel.
5.14 Land Use Impacts This chapter examines how transportation decisions affect land use patterns, and the economic, social and environmental impacts that result. It describes various external costs of increased pavement and automobile-oriented development, and benefits that can result from more resource-efficient land use patterns.
5.15 Water Pollution and Hydrologic Impacts This chapter describes water pollution and hydrologic impacts (changes in surface and ground water flow) associated with transportation facilities and vehicle use.
5.16 Waste Disposal This chapter describes external costs associated with disposal of vehicle wastes.
6. Cost Summary Previous chapters in this guidebook provided monetized estimates of 23 costs for 11 modes under three travel conditions, totaling 759 individual estimates. This chapter summarizes and analyzes these estimates.
7. Evaluating Transportation Benefits This chapter discusses techniques for quantifying transportation benefits, including benefits of marginal cost savings, external benefits, consumer surplus benefits, economic productivity and development, and benefits of transportation diversity.
8. Criticism of Transportation Costing This chapter evaluates various criticisms of transportation costing.
9. Implications Economic evaluation techniques and cost described in this guidebook are used in this chapter to analyze the impacts of current pricing on economic efficiency, economic development, land use, stakeholder perspectives, and travel patterns.
10. Applications and Case Studies This chapter explores some implications of transportation economic evaluation with regard to optimal pricing, economic efficiency, land use, stakeholder perspectives, and travel patterns.
11. Conclusions This chapter summarizes major conclusions and provides recommendations for improving transportation system efficiency and equity.
12. Bibliography This chapter lists some of the literature used in this guidebook.
Transportation Cost Analysis Spreadsheet

This spreadsheet contains estimates of twenty-three costs for eleven modes under three travel conditions from the Transportation Cost and Benefit Analysis report. The spreadsheet is structured to allow these costs to be analyzed in various ways.

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This guidebook is produced by the Victoria Transport Policy Institute to help improve transportation planning and evaluation. It is an ongoing project. Please send us your comments and suggestions for improvement.

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