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Victoria Transport Policy Institute
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Updated 3 January 2009
This chapter describes transportation evaluation methods and how they can be used to evaluate the value of TDM programs. Transportation Demand Management evaluation requires more comprehensive analysis than is often used for transportation planning. This chapter discusses the travel changes caused by different types of TDM strategies, the impacts (benefits, costs and equity effects) that result, and how information in this Encyclopedia can help rate TDM strategies in terms of their ability to achieve various objectives.
General Steps in Economic Evaluation
Transportation Improvement Objectives
Road and Parking
Facility Cost Savings
Evaluating Transportation System Quality
Conventional Versus Comprehensive Evaluation
Cumulative and Synergistic
Impacts
Determining
Incremental Impacts
Analysis
Perspective and Scale
Resource Costs and
Economic Transfers
Common Errors When Comparing Capacity Expansion and TDM
Options
References And Resources For More Information
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You Too Can Be A Policy Analyst or Planner! When evaluating a public policy or project, most people ask, “How
does it directly affect me?” A policy analyst or planner takes a broader
perspective. They consider different perspectives, groups and geographic
scales. They consider indirect and long-term impacts. They consider how a
particular short-term action relates to a community’s overall strategic
objectives. A policy analyst or planner is a professional worrier, always thinking about what could go wrong, and the worst possible conditions that could result. Good policy analysis and planning help communities avoid problems.
Unfortunately, this tends to be a thankless job because beneficiaries never
experience the problems they would otherwise suffer. A doctor who encourages
patients to stop smoking, eat a healthier diet and exercise more is
considered bothersome, while a surgeon who performs a heart transplant after
a patient becomes ill is considered a hero, although a preventive medical
approach usually provides far greater overall benefits. Similarly, good
public policies provide tremendous benefits, but little glory. It’s often a difficult job, but somebody must do it. And the more
knowledge, skill, respect for others and community spirit you can bring, the
better for everybody involved. |
Life is full of tradeoffs. There are only so many hours in a day or dollars in a budget. Economics is the discipline concerned with such trade-offs, that is, how resources can be used to provide the greatest possible benefit.
Economic Evaluation (also called Appraisal or Analysis) refers to methods to determine the value of a planning option to support decision making. Economic evaluation is often applied to transportation decision-making (EEB, 1994; Edwards, 1998; Small, 1999; Schreffler, 2000; Litman, 2001; USDOT, 2003; CUTR, 2007). Specific evaluation methods are described below:
· Cost-Effectiveness compares the costs of different options for achieving a specific objective, such as building a particular road or delivering a particular amount of freight. The quantity of outputs (benefits) are held constant, so there is only one variable, the cost of inputs.
· Benefit-Cost Analysis compares total incremental benefits with total incremental costs of each option. It is not limited to a single objective or benefit. For example, potential highway routes may differ in construction costs and the quality of service (speed and safety) they provide.
· Lifecycle Cost Analysis is Benefit-Cost Analysis that incorporates the time value of money. Lifecycle Cost Analysis allows programs or projects to be compared that have benefits and costs occurring at different times. For example, one option may be quicker to implement but has greater costs or lesser benefits than an alternative. Lifecycle cost analysis is important for determining the best long-term infrastructure maintenance program (FCM, 2002).
· Least Cost Planning is a type of Benefit-Cost Analysis that considers demand management on equal terms with capacity expansion. Least Cost Planning allows TDM to be implemented when it is cost effective.
· Multiple Accounts Evaluation is an analysis method that incorporates both quantitative and qualitative criteria, and can be used when some impacts cannot be monetized. Each option is rated for each criterion.
These methods evaluate the economic impacts (costs and benefits) of a policy or project to determine net benefits or net value (incremental benefits minus incremental costs). Economic analysis is not limited to market (monetary) impacts; it can also incorporate non-market impacts such as travel time, crash risk, environmental impacts and equity objectives. Various techniques are used to determine the monetized value (i.e., how much people would be willing to pay) for these non-market goods (Litman, 2006a; EDRG, 2007). See Cobb, Halstead and Rowe (1999), GDRC (2000) and Bhasin (2005) for other evaluation methods that also take into account factors such as health, quality of life and development.
Transportation decisions often have various levels of impacts. For example, increasing roadway capacity has direct impacts of reducing traffic congestion and increasing vehicle traffic speeds. A second-level impact is that this increased speed and convenience may attract additional travel from other routes and times (Rebound Effects), and it may create barriers to walking and cycling (Nonmotorized Evaluation). A third level impact may be that over the long run, land use patterns change as people and businesses respond to more convenient driving and less convenient nonmotorized travel (Land Use Impacts).
When evaluating transportation management strategies it is helpful to differentiate between their travel impacts (the change per affected person or business) and take up (also called penetration), which reflects how broadly the strategy is applied. For example, Parking Cash Out typically reduces automobile use by 15-20% among commuters where it is applied, but it is not widely applied, so its effects on total travel been small. Critics sometimes complain that TDM is ineffective, citing continued transportation problems such as congestion and pollution in cities that claim to have TDM programs. However, this does not reflect a lack of impacts where TDM is implemented, rather it is a lack of take up of the strategies: few motorists actually face TDM strategies such as Parking Cash Out, Parking Pricing or Road Pricing.
In most planning situations, evaluation concerns incremental impacts, such as an improvement or reduction in transportation facilities or services. For example, planners may want to compare the incremental benefits and costs of a new pedestrian bridge, roadway capacity expansion or improved transit services. This is called a marginal analysis. It is seldom necessary to calculate the total value of transportation facilities or services, such as the total benefits from all pedestrian, roadway or transit travel.
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Marginal Analysis Economic evaluation should be based on marginal analysis, that
is, the incremental impacts (costs and benefits) of an additional unit of
consumption. Marginal analysis means that all costs and benefits are
considered, and that impacts are calculated for each mode, vehicle, location
and time (although as a practical matter these are often grouped into a few
major categories). Marginal analysis means that the costs of increasing
system are assigned only to peak-period travelers, since those are the users
that require it. Marginal impacts often differ significantly from average
impacts. Highway costs may average just 5˘ per vehicle-mile, but the marginal
cost of additional urban-peak vehicle trips may be ten or twenty times higher
because it requires increasing roadway capacity. |
An evaluation framework specifies the basic structure of the analysis for clear and consistent evaluation and comparison. A framework usually identifies:
· Evaluation method, such as cost-effectiveness, benefit-cost, lifecycle cost analysis, etc.
· Evaluation criteria, which are the factors and impacts to be considered in the analysis, including indirect and long-term impacts. Impacts can be defined in terms of objectives or their opposite, problems (for example, congestion reduction is an objective because congestion is considered a problem), or they can be defined in terms of costs and benefits (for example, congestion reduction benefits can be measured based on reductions in congestion costs). Planners tend to use the terms objectives and problems (which are more qualitative), while economists tend to use the terms benefits and costs (which are more quantitative), all of which can be considered different approaches for evaluating the same impacts, as illustrated in the table below.
Table 1 Ways to Describe An Impact
|
|
Positive |
Negative |
|
Qualitative |
Objective |
Problem |
|
Quantitative |
Benefit |
Cost |
Objective, Problem, Benefit and Cost are different ways to describe an impact.
· Modeling techniques, which predict how a policy change or program will affect travel behavior and land use patterns.
· The Base Case, meaning what would happen without the policy or program.
· Comparison units, such as costs per lane-mile, vehicle-mile, passenger-mile, incremental peak-period trip, etc.
· Base year and discount rate, which indicates how costs are adjusted to reflect the time value of money.
· Perspective and scope, such as the geographic range of impacts to consider.
· Dealing with uncertainty, such as whether sensitivity analysis or other statistical tests will be used.
· How results are presented, so that the results of different evaluations are easy to compare.
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Solving
Transportation Problems Transport problems and solutions can be viewed in two different ways.
One is as individual problems with technical solutions: traffic and
parking congestion require building more roads and parking facilities; crash
risk requires roads and vehicles that offer greater crash protection; energy
problems require alternative fuels and efficiency standards; mobility for
non-drivers in automobile-oriented areas requires paratransit services. The
motto is, “adjust roads and vehicles, not driver behavior.” This can be
considered a reductionist model, which considers just one problem at a
time. But this approach has a fundamental flaw. Solutions to one problem
often exacerbate other problems, particularly if they increase total vehicle
travel. For example, over the long run, increasing roadway capacity tends to
increase crashes, energy consumption and pollution, due to Induced
Vehicle Travel; crash protection requires heavier vehicles that consume
more energy; Fuel Efficiency Standards reduce the
per-mile cost of driving, stimulating more traffic congestion and crashes; Paratransit vehicles add traffic congestion, crash risk
and pollution. As a result, a reductionist approach does not usually solve
problems overall, because the more one solution achieves its objectives, the
more it exacerbates other problems. The other perspective is that many transportation problems share a
common root: market distortions that result in excessive automobile use.
From this perspective, solving transport problems requires planning reforms
that increase transport options, and market reforms that give consumers
suitable incentives to choose the best option for each individual trip. The
motto is, “increase transportation system diversity and efficiency.” Transportation
Demand Management or TDM is the
general term for this approach. Although most individual TDM strategies only affect a small portion
of total travel, and so their benefits appear modest with respect any
particular problem, their impacts are cumulative and synergistic. When all
benefits and costs are considered, TDM programs are often the most cost
effective way to improve transportation. Conventional evaluation practices tend to overestimate the overall
benefits of technical solutions because they ignore indirect costs (such as
the problems resulting from induced vehicle travel), and they tend to
underestimate the full benefits of TDM strategies (such as helping to improve
mobility for non-drivers, or support for strategic land use objectives). More
comprehensive Evaluation and Planning
practices are needed for TDM to receive the recognition and support that is
justified. |
A typical economic evaluation involves the following general steps (ECONorthwest and PBQD, 2002). This is a hybrid approach that includes lifecycle cost analysis of impacts that are suitable for monetization, plus a rating system for impacts that are unsuited to monetization.
1. Describe each option, including a base-case and one or more alternatives.
2. Define the analysis framework (described above), which identifies all impacts (costs and benefits) and objectives to be considered in the analysis. Classify impacts to avoid double-counting.
3. Model and monetize (measure in monetary value) impacts, such as changes in congestion, crashes, road and parking facility costs, consumer costs, mobility options for disadvantaged travelers, pollution emissions, etc.
4. Calculate the total monetized benefits and costs for each year that is being considered (typically 10-20 years for a major investment project), and apply a discount value to future impacts. Sum the present value of benefits and costs to determine the Net Present Value.
5. Describe, and measure as much as possible, impacts that are unsuited for monetization (such as equity and effects on strategic community development objectives). Rate each alternative according to how much it supports or contradicts the objectives.
6. Conduct sensitivity analysis to determine how changes in key assumptions affect outcomes.
7. Report result. Develop various ways to illustrate important differences between the options and describe their implications. For example:
·
Produce graphs that illustrate differences in key
impacts.
·
Produce a table or matrix that compares each
alternative in terms of its costs, benefits and rating in terms of objectives
(such as whether it supports or contradicts equity and strategic community
development objectives).
·
Identify the distribution of impacts (which
individual or group bears costs or gains benefits).
·
Produce short summaries that describe key
differences, and factors that may affect these differences.
Of course, these steps can be adjusted and repeated as needed. For example, stakeholders may sometimes request that additional options, impacts or objectives be considered, or that additional analysis be performed to determine the distribution of impacts.
Transportation economic evaluation often involves comparing different types of activities, and investments that have very different cost and benefit profiles. For example, highway investments typically consist primarily of a large capital expense, while TDM programs typically consist of ongoing operating expenses. Highway capacity expansion tends to provide large short-term congestion reduction benefits, but these decline over time due to generated traffic, while TDM programs tend to provide smaller short-term benefits, but these often increase over time as programs develop.
It is therefore important to choose appropriate reference units for comparison. Reference units are measurement units normalized to help people understand and compare impacts. Common reference units include per capita, per mile, per trip, per vehicle and per dollar. Reference units for transportation program economic evaluation should allow costs and benefits that occur at different times to be compared. Lifecycle Cost Analysis and Net Present Value do this, but often result in very large numbers that are difficult for most people to comprehend. For example, the lifecycle costs of a private home (total capital and operating expenses its operating life) may total millions of dollars, and the lifecycle costs of a roadway project or transit service improvement may total tens or hundreds of millions of dollars. It is therefore useful to convert these numbers into annualized costs or annualized costs per capita, or other reference units specific to transportation.
For example, a transportation project costs might be measured per capita, to compare them with other expenditure categories, other years, and other communities. The costs of highway capacity expansion may be measured per lane-mile, to compare with other highway projects, or per additional peak-period person trip, to compare with other ways to accommodate increased travel demand. Which reference units are used can affect how problems are defined and which solutions are considered, as described below.
· Annualized Cost Per Capita is a useful reference unit to help decision-makers and consumers compare projects and programs with other common expenses, such as the cost of owning and operating an automobile.
· Vehicle-mile units reflect a traffic perspective that gives high value to automobile travel.
· Passenger-mile units reflect a mobility perspective that values automobile and transit travel, but gives less value to nonmotorized modes because they tend to be used for short trips.
· Per-trip units reflect an access perspective which gives equal value to automobile, transit, cycling, walking and telecommuting.
· Travel time units reflect an access perspective that gives higher priority to walking, cycling and transit travel, because they tend to represent a relatively large portion of travel time.
· Exposure time reflects the amount of time that a particular person or groups uses a particular facility or is exposed to a particular impact. Slower modes and people who stay along a street have greater exposure time than motor vehicle passengers.
TDM programs can be evaluated in various ways and at various levels. Finke and Schreffler (2004) describe the following possible levels of assessment:
Not all TDM strategies affect travel directly. Some provide a foundation for other strategies that change travel behavior, which in turn have various economic, social and environmental impacts. These relationships are illustrated below.
Policies
(planning and investment practices,
land use practices, tax policies, etc.)
Ż
Programs and Projects
(Commute Trip Reduction, Transportation
Management Associations, Nonmotorized Transport Planning, Parking Management,
school and campus trip management, etc.)
Ż
Strategies That Directly Affect Travel Behavior
(Parking Cash Out, congestion pricing,
transit improvements, improved walking and cycling conditions, flextime,
Location Efficient Mortgages, higher parking fees, etc.)
Ż
Travel Impacts
(mode shifts, shifts in trip
scheduling, shorter trip distances, reduced driving, increased load factors,
etc.)
Ż
Benefits
(improved mobility and access, cleaner air,
road safety, road and parking facility cost savings, consumer savings, etc.)
TDM strategies use a variety of mechanisms to change travel patterns, including facility design, improved transport options, pricing, and land use changes. These affect travel behavior in various ways, including changes in trip scheduling, route, mode, destination, and frequency, plus traffic speed, mode choice and land use patterns. The table below summarizes the travel changes that result from various TDM strategies.
Models are now available which can predict the travel impacts of a specific Commute Trip Reduction program, taking into account the type of program and worksite. These include the TRIMMS (Trip Reduction Impacts of Mobility Management Strategies) Model (www.nctr.usf.edu/abstracts/abs77704.htm), the CUTR_AVR Model (www.cutr.usf.edu/tdm/download.htm), the Business Benefits Calculator (BBC) (www.commuterchoice.gov) and the Commuter Choice Decision Support Tool (www.ops.fhwa.dot.gov/PrimerDSS/index.htm). Mustel (2004) surveyed Vancouver, BC regional motorists to determine what type of travel shifts they consider most feasible. DKS Associates (2003) illustrates an example of impact analysis on a specific corridor. See Transportation Elasticities for information on the travel impacts that result from various price changes. IFS (2001) is an excellent example of an interactive Internet tool that can help public officials and citizens predict the travel impacts of various TDM strategies.
Table 2 Examples of TDM Travel Impacts
|
TDM
Strategies |
Mechanism |
Travel
Changes |
|
Traffic Calming |
Roadway redesign. |
Reduces traffic speeds, improves pedestrian conditions. |
|
Flextime |
Improved transport choice. |
Shifts travel time (when trips occurs). |
|
Road/Congestion Pricing |
Pricing |
Shifts travel time, reduces vehicle travel on a particular roadway. |
|
Distance-based charges |
Pricing |
Reduces overall vehicle travel. |
|
Transit improvements |
Improved transport choice. |
Shifts mode, increases transit use. |
|
Rideshare promotion |
Improved transport choice. |
Increases vehicle occupancy, reduces vehicle trips. |
|
Pedestrian and bicycle improvements |
Improved transport choice, facility improvements. |
Shifts mode, increases walking and cycling. |
|
Carsharing |
Improved transport choice. |
Reduces vehicle ownership and trips. |
|
Smart Growth, New Urbanism |
More efficient land use, improved travel choices. |
Shifts mode, reduces vehicle ownership and trip distances. |
Different types of TDM strategies cause different types of travel changes.
Different types of travel changes provide different types of impacts. For example, a strategy that shifts travel from peak to off-peak periods has different benefits and costs than a strategy that shifts travel modes or encourages more efficient land use. A shift from driving to nonmotorized travel has different impacts than a shift to public transit. Table 3 shows how different travel behavior changes are rated according to the TDM objectives used in this Encyclopedia (described in the next section of this chapter).
Table 3 Benefits of Different Travel Impacts
|
|
Reduced Traffic Speeds |
Shift Trip Time |
Shorter Trips |
Shift Mode |
Reduced Veh. Trips |
Reduced Veh. Ownership |
|
Congestion Reduction |
|
3 |
2 |
2 |
3 |
3 |
|
Road Savings |
|
1 |
2 |
2 |
3 |
3 |
|
Parking Savings |
|
|
|
3 |
3 |
3 |
|
Consumer Savings |
|
|
1 |
2 |
2 |
3 |
|
Transport Choice |
|
1 |
|
3 |
2 |
3 |
|
Road Safety |
3 |
|
2 |
2 |
3 |
3 |
|
Environmental Protection |
1 |
|
1 |
2 |
2 |
3 |
|
Efficient Land Use |
1 |
|
2 |
1 |
2 |
3 |
|
Community Livability |
2 |
|
1 |
1 |
2 |
3 |
Rating from 3
(very beneficial) to –3 (very harmful).
Performance evaluation refers to a process of monitoring and analysis used to determine how well policies, programs and projects perform with regard to their intended goals and objectives (TRB, 2001). This can help identify potential problems and provide guidance for policy, planning and management decisions. This tends to be particularly important for innovative solutions, such as TDM. The US Department of Transportation’s Performance Plan and Performance Report (www.dot.gov/performance), is a good example of an organizational-level evaluation. It includes tables showing whether various objectives and targets have been met during each year.
Performance indicators (also called measures of effectiveness) are specific measurable outcomes used to evaluate progress toward established goals and objectives. A number of performance indicators can be used to evaluate transportation system quality and the effectiveness of a TDM program (Kittleson & Associates, 2003). These usually include both quantitative measures of Mobility and Access, and qualitative measures of user acceptance and satisfaction (Surveys). In most cases, no single indicator is adequate, so a set of indicators that reflect various objectives and perspectives are used. Which indicators are selected and how they are weighted and presented implicitly defines the value placed on different objectives.
Successful Performance Evaluation:
· Comprises a balanced set of a limited vital few measures.
· Produces timely and useful reports at a reasonable cost.
· Displays and makes readily available information that is shared, understood, and used by an organization.
· Supports the organization's values and the relationship the organization has with customers, suppliers, and stakeholders.
A good performance indicator:
· Is accepted by and meaningful to the customer.
· Tells how well goals and objectives are being met.
· Is simple, understandable, logical, and repeatable.
· Shows a trend.
· Is unambiguously defined.
· Allows for economical data collection.
· Is timely.
· Is sensitive.
Below are Performance Indicators suitable for evaluating TDM programs (Schreffler, 2000). These indicators can be defined for a particular time (such as peak-hour) and geographic location (such as a particular destination, district or region).
· Awareness – the portion of potential users who are aware of a program or service.
· Participation – the number of people who respond to an outreach effort or request to participate in a program.
· Utilization – the number of people who use a service or alternative mode.
· Mode split – the portion of travelers who use each transportation mode.
· Mode shift – the number or portion of automobile trips shifted to other modes.
· Average Vehicle Occupancy (AVO): Number of people traveling in private vehicles divided by the number of private vehicle trips. This excludes transit vehicle users and walkers.
· Average Vehicle Ridership (AVR): All person trips divided by the number of private vehicle trips. This includes transit vehicle users and walkers.
· Vehicle Trips or Peak Period Vehicle Trips: The total number of private vehicles arriving at a destination (often called “trip generation” by engineers).
·
Vehicle Trip Reduction – the number or
percentage of automobiles removed from traffic.
· Vehicle Miles of Travel (VTM) Reduced – the number of trips reduced times average trip length.
· Energy and emission reductions – these are calculated by multiplying VMT reductions times average vehicle energy consumption and emission rates.
· Cost Per Unit of Reduction – these measures of cost-effectiveness are calculated by dividing program costs by a unit of change. For example, the cost effectiveness of various TDM programs could be compared based on cents per trip reduced, or ton of air pollution emission reductions. However, as described later, cost-effectiveness analysis that only considers direct impacts and a single objective may overlook additional costs and benefits to participants and society. For example, two TDM programs may have the same direct costs per unit of emission reduction, but differ significantly in terms of consumer costs, consumer travel options, traffic congestion, parking costs, crash risk and land use impacts.
Evaluation studies can compare performance indicator values before-and-after, over time (for example, over months or years), with-and-without (for example, comparing performance indicators at a worksite or area that has a TDM program with otherwise comparable sites that do not have such programs, or with regional averages).
This Encyclopedia evaluates each TDM strategy according to the eight transportation improvement objectives described below. It uses a 7-point rating system that ranges from 3 (strongly benefits that objective) to –3 (very harmful to that objective). For example, a TDM strategy that encourages motorists to shift some of their trips from peak to off-peak time periods may rate a 3 in terms of congestion reduction, but only a 1 in terms of environmental protection. Of course, actual impacts vary depending on circumstances, and so ratings should be adjusted to reflect specific conditions when they are applied to a particular project evaluation.
Reduced urban-peak vehicle travel tends to reduce traffic congestion (in this case, “urban” includes suburbs, small towns and resort communities during tourist season). Traffic congestion is a non-linear function, meaning that a small reduction in urban-peak traffic volume can cause a proportionally larger reduction in delay. For example, a 5% reduction in traffic volumes on a congested highway may cause a 10% or even greater reduction in congestion delays. As a result, even relatively small traffic reductions can provide relatively large travel time savings benefits.
Traffic congestion is
usually defined and measured only in terms of the delays that motor vehicle
traffic imposes on other motor vehicles. Traffic impacts on cyclists and
pedestrians are usually ignored, although in some areas they represent a major
share of travel delay (Evaluating Nonmotorized Transport).
Incorporating impacts on nonmotorized travel tends to increase the predicted
benefits of TDM strategies that reduce vehicle traffic volumes, and reduce the
benefits of congestion reduction strategies that involve roadway widening which
creates barriers to nonmotorized travel.
Generated Traffic tends to reduce the congestion reduction benefits of highway capacity expansion and some types of TDM strategies, particularly over the long-term. Generated Traffic consists of additional vehicle travel that occurs when urban highway capacity is increased or when TDM strategies reduce peak-period vehicle trips (Rebound Effect). Put another way, urban traffic congestion tends to maintain a self-limiting equilibrium by constraining growth in peak-period trips. Some TDM strategies produce little or no generated traffic and so tend to be particularly effective at reducing traffic congestion delays.
·
Grade separated Transit
Improvements and HOV facilities can reduce traffic
congestion on parallel highways (Evaluating Public Transit)
·
Pricing strategies such as Road
Pricing, Distance-Based Fees and Comprehensive
Market Reforms tend to shift the demand curve,
reducing the overall point of congestion equilibrium.
·
Land use management strategies such as New Urbanism and Smart Growth that
result in more Clustering may increase local traffic
congestion (within the clustered area), but reduce per capita vehicle travel,
and reductions in regional traffic congestion, resulting in overall reductions
in congestion costs. For more discussion see Land Use
Impacts on Transportation.
Reduced vehicle travel can reduce the need to add roadway capacity, reduce some roadway operations and maintenance costs, and reduce some traffic service costs, such as policing and emergency response. Shifts from automobile to bus transport may increase some road maintenance costs (heavy vehicles tend to cause high levels of road wear). Reductions in automobile trips may provide little parking cost savings in the short-run if there is abundant parking supply. However, over the long term, the excess parking spaces or their land can be used for other purposes. Parking Management can help capture these benefits.
Many TDM strategies can provide consumer savings by improving Transportation Options, reducing Vehicle Costs, or providing direct financial benefits. Savings can be especially large if a TDM program allows a household to reduce the number of vehicles it owns or to defer the replacement of an older vehicle. Some TDM strategies, such as commuter financial benefits and transit fare reductions, provide direct payments or savings to consumers. Conversely, some TDM strategies increase consumers cost by increasing fees for parking, road or vehicle use. Some TDM strategies affect non-monetary consumer costs, such as travel time and comfort. The value of these impacts can be calculated based on Consumer Surplus analysis, as described later in this chapter.
Many TDM strategies improve Transportation Options by improving alternative modes,
providing new pricing options, or increasing land use Accessibility.
This provides various types of benefits to consumers and society, including
improved access and opportunity, consumer cost savings, increased Equity, improved community Livability,
and reductions in various external costs. Adequate Transportation Options are a
key Market Principle for economic efficiency and
equity. Multi-Modal Level-of-Service Indicators can be used to
evaluate the quality of various transport modes from a users perspective,
including factors such as comfort, convenience, affordability and security.
Some TDM strategies increase consumer
options in ways that increase mobility. For example, Carsharing
and Pay-As-You-Drive Insurance makes vehicle use more
affordable for lower-income drivers, and Transit
Improvements may increase personal travel (not every additional transit
trip represents an automobile trip reduced). TDM evaluation that only considers
traffic congestion or emission reduction objectives will overlook these mobility benefits (Evaluating Public Transit).
Many TDM strategies provide Traffic Safety, Resilience, Security and Public Health benefits (Safety Impacts of TDM). Strategies that reduce total vehicle mileage, reduce traffic speeds, or provide an incentive for safer driving tend to be particularly effective at reducing crashes. Strategies that reduce traffic congestion without reducing mileage, by shifting travel times and routes, have mixed safety benefits: although crashes tend to decline, collisions that do take place tend to be more severe because they occur at higher speeds (Shefer and Rietvald, 1997).
TDM strategies that reduce vehicle mileage, optimize vehicle speeds and reduce traffic congestion provide Energy Conservation and Emission Reductions. Strategies that encourage motorists to use more efficient, less polluting vehicles, or which reduce total vehicle ownership and trips, tend to be particularly effective at energy and emission reductions. Some strategies encourage more efficient land use patterns that reduce per capita impervious surface coverage (the amount of land paved for roads, paths and parking facilities, or covered by buildings), which helps preserve greenspace and reduce stormwater management costs. Special techniques are needed to evaluate indirect and cumulative impacts (MacDonald and Lidov, 2005).
Strategies that encourage more Clustered, multi-modal, mixed land use patterns can improve Accessibility and reduce per capita impervious surface coverage and land consumption (Land Use Evaluation). This can provide a number of economic, social and environmental benefits compared with more dispersed, automobile-dependent land use patterns (Burchell, 1998). Smart Growth, New Urbanism, Transit Oriented Development, Location Efficient Development, Clustered Land Use, Parking Management, Pedestrian and Cycling Improvements and Traffic Calming are particularly effective at increasing land use efficiency.
The study Business Benefits of TDM (Winters and Hendricks, 2001) identified the following potential benefits to employers from Commute Trip Reduction programs:
· Reduced Overhead Costs. Increased competition and need to build shareholder value place more pressure on businesses to lower their cost of doing business as well as increase revenues and/or margins. Strategies such as telecommuting and parking management can make a difference. Telecommuting can reduce office space requirements. Parking management can eliminate the need to build additional parking.
· Enhanced Employee Recruitment and Retention. A shrinking labor force has increased competition for qualified applicants. Similarly, the cost of replacing an employee in productivity and direct costs can be very expensive.
· Expanded Employee Benefits at Low/No Cost. Employers can take advantage of changes in the federal tax treatment of commute-to-work fringe benefits to benefit employees and reduce costs. Employers can now provide employees with a tax-free benefit and/or offer to subtract the cost of transit, vanpool, or parking as a pre-tax payroll deduction option.
· Enhanced Corporate Image. Employers with environmental image problems and/or difficulties with their neighbors often seek to mitigate the problems using a combination of trip reduction strategies.
· Reduced Localized Transportation Problems. Employers are well-aware of the value of banding together to address common problems. More employers are joining transportation management associations (TMAs) to address access and mobility problems in their immediate area.
· Expanded service hours. Work hour schedules such as flextime, staggered work hour programs, compressed work week programs enable organizations to provide additional coverage with the same total number of employers
· Lower absenteeism and tardiness. Employees may earlier time commitments to their carpool partner or to meet the bus. Telework may allow work to be accomplished when travel to the office isn’t possible.
· Increased employment opportunities for the disabled and others unable to meet traditional work hours. Telework provides an alternative to having to physical transport.
· Reduced employee stress. Employee health is significantly related to the distance and duration of the trip. People who are exposed to high levels of traffic congestion arrive at work with higher blood pressure than people who are not exposed. The more sensitive long distance commuters are to the effects of commuting on family life, the greater the inclination to try alternatives to solo driving.
· Enhanced employee productivity. One of the oft-cited benefits of telework is productivity increase.
Community Livability refers to the environmental and social quality of an area as perceived by residents, employees, customers and visitors. This includes crash risk, noise, local pollutants (e.g., dust), preservation of unique cultural and environmental resources (e.g., historic structures, mature trees, traditional architectural styles), attractiveness of streets, opportunities for recreation and entertainment, and the quality of social interactions, particularly among neighbors. A livable community directly benefits people who live in, work in or visit the neighborhood, increases property values and business activity, and it can improve public health and safety.
Many TDM strategies improve community livability by helping to create more attractive pedestrian conditions, creating more accessible land use patterns, and reduce total vehicle traffic on local streets. In particular, New Urbanism, Nonmotorized Transportation Improvements, Street Reclaiming, Traffic Calming, School Trip Management, Address Security Concerns, Car-Free Planning and Vehicle Restrictions can directly improve local environmental conditions, improving community livability.
TDM strategies can impose various costs. These are described below.
Many TDM programs
have direct resource costs, including financial expenses, road space and
traffic management priorities, and staff time.
Some TDM programs increase motorist financial costs or reduce their travel time. In response to these higher costs, some consumers forego travel or shift to less desirable travel modes.
Some TDM strategies increase transaction costs. For example, charging motorists directly for parking or road use requires systems to collect money and enforce payment. They also inconvenience motorists. (Newer electronic pricing mechanisms can significantly reduce transaction costs.)
TDM strategies that involve pricing result in economic transfers, that is, money is transferred from one group or economic sector to another (Evaluating Pricing). These are not true resource costs, but they represent costs to the consumers and businesses that pay additional charges.
Some TDM strategies have spillover impacts that should be considered in evaluation. For example:
· Road Pricing may shift vehicle travel and congestion problems to untolled roads.
· Traffic Calming may shift traffic impacts to other roads.
Parking Pricing in one area may increase parking problems in nearby areas, and may shift economic activity to areas that offer free parking.
|
Consumer
Costs of Reduced Mobility Critics of TDM sometime argue that strategies which reduce automobile
travel impose significant but difficult to measure reductions in consumer
mobility benefits. This is not quite true. The following guidelines can be
used to evaluate consumer mobility costs from TDM: 1.
TDM strategies that are optional to consumers and
rely on positive incentives (such as improvements in alternative modes and
positive financial incentives such as Parking Cash Out)
directly benefit consumers, or they would not accept them. 2.
The consumer surplus impacts of pricing incentives
can be measured using the rule of half. 3.
Most TDM incentives allow consumers to choose
which trips to forego, resulting in reductions in the least-beneficial
vehicle travel, so reductions in consumer surplus tend to be small. 4.
Road and Parking pricing are economic transfers (money shifted)
and so their overall impacts depend on how revenues are used. For example,
Road Pricing costs may be offset by reductions in taxes or public service
improvements financed by the additional revenue. |
Equity analysis reflects the distribution of costs and benefits. These issues are discussed in the chapter Evaluating TDM Equity. The Encyclopedia evaluates TDM strategies in terms of the five Equity objectives described below.
·
Treats everybody equally. This reflects
whether a strategy treats each group or individually equally.
·
Individuals bear the costs they impose. This reflects
whether a strategy makes individual consumers bear the costs they impose,
meaning that subsidies are less than they would be with automobile travel.
·
Progressive with respect to income. This reflects
whether a strategy increases Transportation Affordability
and makes lower-income households better or worse off.
·
Benefits transportation disadvantaged. This reflects
whether a strategy makes people who are transportation disadvantaged better off
by increasing their travel options or providing financial savings.
·
Improves Basic Access. This reflects
whether a strategy favors more important transport (emergency response,
commuting, essential shopping) over less important transport.
Although some TDM programs require subsidies, these are only considered unfair if they are greater than subsidies for comparable automobile travel. Expenditures on alternative modes may simply represent an alternative way for non-drivers to receive their share of transportation resources. Even if alternative modes have a greater subsidy per mile than automobile travel, non-drivers tend to travel much less per year than motorists, and so per capita subsidies may be much small (Transit Evaluation).
Equity analysis of TDM programs should also take into account any indirect benefits to motorists. For example, transit improvements benefit transit riders directly, and motorists may benefit indirectly if more attractive transit services reduces traffic congestion or competition for parking.
How transportation is Measured can have a major impact on the evaluation of a particular policy or program. For example, measuring transportation systems in terms of motor vehicle traffic capacity (e.g., roadway Level of Service ratings and volume to capacity ratios) favors strategies that expand road and parking facility capacity, and gives relatively little value to strategies that improve transportation alternatives (transit and walking conditions) or land use accessibility (increased land use clustering and mix). In recent years methods have been developed to better measure the quality of Accessibility, Nonmotorized Transportation and Transit Service, similar to existing tools for evaluating motor vehicle traffic conditions (FDOT, 2002).
TDM evaluation often involves comparing service quality of different modes, such as:
This information can be used to help identify problems and solutions. For example, increased automobile mode split can often be explained by factors such as the increased travel speeds and affordability of automobile travel relative to alternative modes, and efforts to shift travel to other modes can be evaluated by setting targets for improving their relative quality and affordability.
Transportation system quality can be evaluated by surveying users concerning their views of how well various components meet their needs, their evaluation of attributes such as convenience, comfort, safety and affordability, and descriptions of the problems and barriers they perceive. For example, the 1995 National Personal Transportation Survey includes questions that rate highway, transit, sidewalks, bicycle facilities and air travel on a scale from “excellent” to “poor” (NPTS, 1997).
Conventional transportation planning Models evaluate transportation projects by comparing direct project costs with travel time, vehicle operating cost, and crash cost savings (TTI, 1999; World Bank, 2000). These may be adequate for comparing alternatives that are similar in terms of the type and amount of travel that will occur, but a more Comprehensive Transportation Planning framework is needed when comparing investments in different modes or evaluating a TDM program. Table 4 compares conventional and comprehensive transportation evaluation.
Table 4 Comparing Conventional and Comprehensive Planning (Comprehensive Planning)
|
|
Description |
Conventional |
Comprehensive |
|
Selection of Options |
The range of solutions that are considered, including capacity expansion and TDM programs. |
Often ignores TDM options |
Includes TDM options |
|
Investment Practices |
How funding is allocated, and the flexibility with which it can be used for the best overall option. |
Favors large capital investments |
Applies least-cost planning |
|
Underpricing |
Degree to which vehicle use is underpriced, resulting in excessive travel demand. |
Ignored |
Considered when determining travel demand and solutions. |
|
Modeling Practices |
Whether transport modeling uses current best practices to predict travel and economic impacts. |
Limited analysis capability |
More comprehensive capability |
|
Measuring Transportation |
Methods and perspectives used to measure travel (vehicle traffic, mobility or accessibility) |
Measures vehicle traffic |
Measures accessibility |
|
Uncoordinated Decisions |
Whether transport and land use decisions are coordinated to support strategic regional objectives. |
Not considered a problem |
Considered a problem, and addressed when possible. |
|
Generated Traffic |
Whether modeling and planning take into account the full impacts of generated traffic and induced travel. |
Ignores many components |
Includes all components |
|
Downstream Congestion |
Additional congestion on surface streets that results from increased highway capacity. |
Ignores when evaluating individual projects |
Includes |
|
Consumer Impacts |
Techniques used to evaluate the consumer impacts of changes in the transport system (e.g., improved travel options, mode shifts, pricing). |
Travel time changes |
Consumer surplus analysis |
|
Vehicle Costs |
Whether all vehicle costs and savings are considered when evaluating options that affect automobile mileage, including long-term costs. |
Only considers short-term operating costs |
Includes all affected vehicle costs |
|
Parking Costs |
Whether parking costs are considered, including costs borne by motorists, businesses and governments. |
Only if paid by motorist |
Includes |
|
Construction Impacts |
Whether increased congestion delays during construction periods are considered in evaluation. |
Ignores |
Includes |
|
Impacts on Nonmotorized Travel |
Whether impacts on the accessibility, convenience, safety, comfort and cost off walking and cycling are considered. |
Ignores |
Includes |
|
Impacts on Transportation Diversity |
Whether impacts on the quantity and quality of travel options (particularly those used by non-drivers) are considered. |
Limited analysis |
Comprehensive analysis |
|
Environmental Impacts |
Impacts on air, noise and water pollution; greenspace preservation and community livability. |
Limited analysis |
Comprehensive analysis |
|
Impacts on Land Use |
The degree to which each option supports or contradicts strategic land use objectives. |
Ignores |
Includes |
|
Equity Impacts |
The degree to which each option supports or contradicts community equity objectives. |
Limited analysis |
Comprehensive analysis |
|
Safety and Health Impacts |
Impacts on traffic safety, personal security and public health. |
Per vehicle-mile crash risks |
Per-capita health risks |
This table summarizes differences between conventional and comprehensive transportation planning.
Conventional transportation evaluation tends to undervalue TDM programs because it ignores or understates some costs of automobile travel, and some benefits of a more efficient and diversified transportation system. A conventional analysis framework will often indicate that highway capacity expansion is the best solution to traffic problems, while a more comprehensive framework will favor a TDM solution.
|
Optimization Optimization refers to solutions that provide the best balance
between multiple, conflicting objectives. Transport planning is sometimes reductionist (evaluation that
considers just one or two objectives), which can result in non-optimal
solutions that may make society worse overall. For example, decision-makers
overwhelmed by the perceived complexity of considering multiple planning
objectives sometimes ask planners to focus on just one or two problems. This
can result in decisions that address certain problems (such as congestion or
pollution) which exacerbate other problems (such as accidents and inadequate
mobility for non-drivers), and tends to undervalue solutions that provide
multiple benefits. More comprehensive optimization
tends to be best for society overall. |
This section describes several special issues to consider when evaluating TDM.
TDM evaluation is affected by the scope of analysis. For example, Tal (2008) describes how less sophisticated analysis exaggerated the potential VMT reduction impacts of Telework. Earlier analysis simply asked, “What portion of employees can telecommute?”, but over time the analysis became more sophisticated, taking into account more variables that affect the total vehicle travel reductions, as illustrated below:
|
Who Can? |
Who Wants To? |
Who Will? |
How Often? |
How Long? |
How Far? |
Will it stimulate
travel? |
Will it stimulate
sprawl? |
More comprehensive analysis, which takes into account more of these factors, tends to provide more accurate predictions of travel impacts, and therefore benefits.
The most effective TDM programs usually include a combination of positive incentives (sometimes called “carrots” or “sweeteners”) and negative incentives (called “sticks” or “levelers”). When implemented together they tend to have synergetic impacts (their total impacts are greater than the sum of their individual impacts), so it is important to evaluate a TDM program as a package, rather than each strategy individually. For example, Parking Cash Out and a Rideshare program at a worksite might individually only reduce commute trips by 5%, but if implemented together as part of a Commute Trip Reduction program, they may reduce 20% of trips. The entire program should be evaluated rather than the individual strategies.
Use care when calculating the cumulative impacts of several strategies. Total impacts are multiplicative not additive, because each additional factor applies to a smaller base. For example, if one strategy (e.g., parking pricing) reduces automobile trips by 20%, and a second strategy (e.g., improved transit service) reduces driving by an additional 15%, their combined effect is calculated 80% x 85% = 68%, a 32-point reduction, rather than adding 20% + 15% = 35%. This occurs because the 15% reduction applies to a base that is already reduced 20%. If a third strategy (e.g., an aggressive marketing program) reduces demand by another 10%, the total reduction provided by the three factors together is 38.8% (calculated as 100% - [80% x 85% x 90%] = 100% - 61.2% = 38.8%), not 45% (20% + 15% + 10%).
Conventional transportation planning and investment Models often evaluate economic impacts by assigning standard values to travel time, which assumes that any increase in travel time represents a cost to consumers, and any reduction in travel time represents a benefit. They assume that consumers must be worse off whenever they travel slower. This ignores consumer preferences, that is, the possibility that travelers may sometimes prefer slower modes.
For example, many people enjoy walking and cycling and will chose them for some trips, despite their slower speed. Consumers sometimes consider time spent walking and cycling a benefit rather than a cost, as indicated by the popularity of recreational walking and cycling. Similarly, some people prefer ridesharing or transit because they find it less stressful than driving. Yet, many transportation models assume that such shifts harm consumers, because of their slower speed.
The assumption that any mode shift increases consumer costs is clearly incorrect for strategies that rely on positive incentives, such as Transit Improvements, Walking and Cycling Improvements and Parking Cash Out. These strategies give consumers better transport options or financial rewards for using alternative modes, but those who continue driving are no worse off. As a result, travelers only change mode if they are directly better off overall.
Evaluation practices that treat any increase in travel time as a consumer cost tend to favor transportation improvements that increase vehicle mobility, and undervalue TDM strategies that improve transportation options or reward to people who shift mode.
Accurate TDM evaluation requires a consumer surplus based evaluation model, which is a method of measuring the value that consumers place on a change in the price or quality of the goods they consume (in this case travel is considered a good). The basic technique for evaluating consumer impacts of price changes is to use the incremental cost to consumers who don’t change their travel, plus half the change in price times the number of trips that increase or decrease, known as the rule of half, which represents the midpoint between the old price and the new price (EEB, 1994; Small, 1999).
For example, if a $1 highway toll increase causes annual vehicle trips to decline from 3 million to 2 million, the reduction in consumer surplus (the total net cost to consumers) is $2,500,000 ($1 x 2 million for existing trips, plus $1 x 1 million x ˝ for vehicle trips foregone). Similarly, if a 50˘ per trip transit fare reduction results in an increase from 10 million to 12 million annual transit trips, this can be considered to provide $6 million in consumer surplus benefits (50˘ x 10 million for existing trips, plus 50˘ x 2,000,000 x ˝ for added trips). Consumer surplus impacts of transportation changes that do not involve pricing are more difficult to measure, but can be evaluated using market surveys and other techniques that reveal consumer preferences.
|
Explanation of the “Rule
of Half” Economic theory suggests that when consumers change their travel in
response to a financial incentive, the net consumer surplus is half of their
price change (called the rule of half).
This takes into account total changes in financial costs, travel time,
convenience and mobility as they are perceived by consumers. Let’s say that the price of driving (that is, the perceived variable
costs, or vehicle operating costs) increased by 10˘ per mile, either
because of an additional fee (e.g., paid parking) or a financial reward, and
as a result you reduced your annual vehicle use by 1,000 miles. You would not
give up highly valuable vehicle travel, but there are probably some
vehicle-miles that you would reduce, either by shifting to other modes,
choosing closer destinations, or because the trip itself does not seem
particularly important. These vehicle-miles foregone have an incremental value to you, the
consumer, between 0˘ and 10˘. If you
consider the additional mile worth less than 0˘ (i.e., it has no value), you
would not have taken it in the first place. If it is worth between 1-9˘ per
mile, a 10˘ per mile incentive will convince you to give it up – you’d rather
have the money. If the additional mile is worth more than 10˘ per mile, a 10˘
per mile incentive is inadequate to convenience you to give it up – you’ll
keep driving. Of the 1,000 miles foregone, we can assume that the average net
benefit to consumers (called the consumer
surplus) is the mid-point of this range, that is, 5˘ per vehicle mile.
Thus, we can calculate that miles foregone by a 10˘ per mile financial
incentive have an average consumer surplus value of 5˘. A $100 increase in
vehicle operating costs that reduces automobile travel by 1,000 miles imposes
a net cost to consumers of $50,
while a $100 financial reward that convinces motorists to drive 1,000 miles
less provides a net benefit to
consumers of $50. Some people complicate this analysis by trying to track changes in
consumer travel time, convenience and vehicle operating costs, but that is
unnecessary information. All we need to know to determine net consumer
benefits and costs is the perceived change in price, either positive or
negative, and the resulting change in consumption. All of the complex
trade-offs that consumers make between money, time, convenience and the value
off mobility are incorporated. |
Evaluation should be based on incremental (also called marginal) impacts. For example, the congestion reduction benefit of a shift from driving to bus transit is the difference in congestion impacts for automobile travel and bus travel. The parking cost savings of Park & Ride is the difference in cost between a parking space at the worksite and at the urban fringe.
Determining incremental costs requires defining the Base Case, meaning what would happen without the policy or program. For example, when evaluating an HOV Lane, the Base Case could either be no additional lane, or an additional general-use lane. Similarly, when evaluating Road Pricing, the Base Case could either the same road capacity provided with a different funding source, less road capacity, or something in between. It is important that the Base Case be explicitly described in any analysis, and all incremental savings or costs be identified.
Net benefits of a shift from driving to alternative modes (ridesharing, transit, cycling or walking) include the savings from reduced car travel minus any incremental costs from the alternative mode. Conventional transportation evaluation often overlooks some categories of Vehicle Costs, such as mileage-based depreciation, which understates the consumer savings that result from reduced automobile use. Some TDM strategies such as Transit Improvements and Carsharing allow some households to reduce their vehicle ownership, providing additional savings. As a result, actual consumer savings from reduced vehicle use are two or three times greater than typically recognized in conventional transportation economic evaluation.
Incremental costs depend on whether or not a particular trip requires additional system capacity, such as additional road space, parking space, or additional vehicles. This often depends on whether that trip occurs during peak periods (when there is no additional capacity) or off-peak periods (when additional capacity is available).
The marginal cost of Ridesharing is nearly zero if a vehicle has an extra seat that would otherwise travel empty (there is a small increase in fuel consumption and emissions). The incremental cost increases if the rideshare vehicle must driver out of its way to pick of riders, or if a larger vehicle (e.g. a van) is purchased just to carry passengers. Similarly, if a Transit system has excess capacity, shifts from driving to transit may have minimal incremental cost. However, if increased ridership requires additional vehicle capacity or results in uncomfortably crowded transit vehicles, the incremental costs are greater.
Similarly, if a traveler already has a suitable bicycle, the marginal cost of a shift from driving to cycling will be small, consisting of just a couple cents per kilometer for tire replacement and maintenance. However, if consumers must purchase or refit a bicycle, the costs are higher.
The costs of projects intended primarily to increase capacity and reduce congestion should be allocated to peak-period users, because additional capacity is not needed during off-peak periods. If roadway projects also improve off-peak traffic speeds, safety or convenience, then that portion of project costs can be charged to off-peak users.
Incremental costs can also take into account the impacts of alternative uses of consumers’ time and money. For example, the net savings of Telework are reduced if telecommuters take additional mid-day vehicle trips to run errands and socialize, or if they consume additional energy to heat and cool their homes during the day. Similarly, if automobile cost savings allow consumers to spend more money on other socially and environmentally harmful goods or services, net benefits may be smaller than predicted. However, since urban-peak automobile travel tends to have greater costs than most other consumer activities, mobility management usually provides net benefits overall.
TDM strategies, like most economic programs, will eventually have diminishing marginal benefit. There is an optimal level of implementation, beyond which incremental costs exceed incremental benefits. TDM programs need to track these incremental impacts and limit such programs. For example, Ridesharing programs may be extremely cost effective when properly implemented, but once the potential rideshare market is satisfied there will be little additional benefit from simply expanding a rideshare program, for example, by sending out more promotional material. Instead, further expansion may require implementation of additional TDM strategies, such as Commuter Financial Incentives, to expand the size of the market. Similarly, Cycling improvements can be cost effective where there is latent demand for this mode, but that does not mean that it is unnecessary to carefully evaluate investments in bikepaths to insure that they are cost effective; there may be better ways to support cycling, such as Education and Encouragement programs.
The apparent value of a TDM program or strategy can be affected by the perspective and scale of analysis. For example, a comprehensive Commute Trip Reduction program might reduce vehicle trips at participating worksites by 20%, representing 50% of downtown employees, where 10% of regional employees are located. Commute trips usually represent the majority of peak-period highway travel, but only about a third of total automobile travel. As a result, this program could be described as reducing 20% of trips a participating worksites, 10% of downtown commute trips, 2% of regional peak-period highway travel, or less than 1% of total regional travel. From a regional perspective the program may seem of little significance, although a major investment to increase highway capacity typically affects a similar portion of trips. As a result, it could be considered equal in value to multi-billion dollar expenditures on new roads and parking facilities, and it may be the most cost effective regional transport investment available.
When evaluating transportation policies and programs it is usually best to consider all impacts, regardless of where they occur. Impacts within a particular area or analysis period may be highlighted, but costs and benefits that occur outside the jurisdiction should not be ignored. For example, a community’s TDM program may help alleviate traffic congestion and parking demand in an adjacent town. These additional benefits should be mentioned even if they are not the primary consideration in decision making, since such benefits may justify support from other levels of government.
It is important to present analysis results in units that are easy to understand and compare. For example, costs and benefits can be measured in annualized dollars per capita, per vehicle, per additional passenger-trip, per vehicle-mile, per passenger-mile or per ton-mile of freight. This is easier for most people to interpret than the extremely large numbers that often result from economic analysis. For example, a road or transit project might be predicted to cost $376.8 million, and provide $124 million in Net Present Value. These numbers are beyond most people’s comprehension. It is better to convert them to dollars per resident, per passenger-trip or per passenger-mile.
Since some TDM strategies reduce average trip distances or reduce the total need to travel, the best unit to use for evaluating TDM is usually the passenger-trip. This reflects an emphasis on access, rather than treating mobility as an end in itself (Measuring Transportation). For example, Smart Growth and Telework reduce the amount of travel needed for errands and commuting, providing savings per passenger-trip, although travel costs per passenger-mile may stay the same or even increase. Units often used in conventional transportation evaluation that emphasize vehicle mobility (e.g., roadway level of service, vehicle traffic volumes and speeds) tend to undervalue alternative modes and demand management solutions to transportation problems.
The units used for evaluation should reflect marginal costs and benefits. For example, roadway capacity expansion project should be evaluated in terms of costs per additional peak-period unit of travel (vehicle-trip, passenger-trip, vehicle-mile) rather than assigning the cost to all road users, including off-peak travelers who do not directly benefit (although improved safety or other benefits to off-peak travelers should be assigned to those users).
People involved in economic analysis should understand the difference between accuracy and precision (Shoup, 2003). Accuracy refers to the correctness of information. Precision refers to the level of detail in measurements. A measurement can be very precise but inaccurate. With modern computers it is possible to calculate analysis at a far greater degree of precision that is justified by the source data accuracy.
|
“Not everything that can be counted counts, and not everything that
counts can be counted.” -Albert Einstein |
The effects of TDM programs and strategies tend to change over time. Some TDM programs have immediate impacts while others may take years to have significant effects. In general, strategies that incorporate financial incentives, improve transportation choice or involve land use management tend to become more effective over time as consumers incorporate them into long-term decisions. On the other hand, the effects of programs that attempt to change travel behavior by appealing to people’s good intentions (or guilt) tend to decline over time as promoters and participants lose interest.
It is important to differentiate between resource costs and economic transfers. Resource costs reduce the total supply of a scarce resource. Economic transfers shift resources from one person or group to another. For example, traffic crashes cause economic costs (i.e., damage to vehicles and people). Parking Pricing is primarily an economic transfer, since payments by motorists are revenue to the parking facility owner.
Conversely, when an employer provides financial incentives to commuters who use alternative modes, this cost to employers is offset by the economic benefit to the commuters who receive additional money. The true resource costs of such programs are any transaction and enforcement costs, such as administrative and policing expenses, and any additional inconvenience to users, such as the time required to make a payment. When evaluating TDM programs that involve pricing it is important to take into account both the costs (payments) and the benefits (revenue) of these economic transfers. Of course, such costs and benefits are very real and important to the individuals who pay or receive them, and have important equity impacts that must be considered, as described later.
Conventional traffic Models often use simplified travel time cost functions which assumes that any shift from driving to an alternative mode increases travel time costs. This is wrong for two reasons. First, alternative modes are sometimes as fast as driving. Cycling is often as fast as driving for short trips, door-to-door. Ridesharing and transit are sometimes faster than driving with grade separated systems or HOV Priority.
Second, consumers do not always consider additional travel time a cost. The value that people assign to travel time is highly variable, depending on factors such as comfort and enjoyment. For example, some people prefer transit or rideshare travel to be less stressful than driving in traffic. Other people enjoy walking or bicycling for recreation and exercise, and will choose these modes even if the trips take longer. In other words, consumers sometimes consider time spent travel by alternative modes to have a lower cost per minute than driving.
If a positive incentive (such as a Transit Improvements, Pedestrians and Cycle Improvements or Parking Cash Out) induces consumers to shift from driving to an alternative mode, they must be directly better off or they would not make the change.
For this reason, newer transport cost Models use consumer surplus analysis to measure the incremental costs and benefits of travel changes. This techniques estimates net benefits and costs to consumer based on their willingness-to-pay (Small, 1999). This is a far more accurate way to measure economic impacts than traffic models that use general assumptions about travel time costs.
Transportation Demand Management tends to support economic development by increasing transportation system efficiency and shifting consumer expenditures to goods that provide more local employment and business activity (TDM and Economic Development). Many TDM strategies can increase economic efficiency and productivity because they reflect Market Principles. This is not to say that all TDM programs increase economic development, but choosing TDM policies and strategies that reflect market principles can provide additional economic benefits that are not usually reflected in conventional economic analysis.
For example, funding road and parking facilities with user charges tends to be more efficient and fair than indirect funding, and variable fees that increase during congested periods are more efficient and equitable than flat fees. Similarly, strategies that improve transport choice (particularly improvements to Basic Mobility) can provide broad economic benefits that may be difficult to measure. Economic analysis should indicate how a proposed policy or program impacts market principles and economic development objectives.
Various techniques can be used to Model the economic impacts of a particular transportation policy or project, including transportation-land use models, benefit-cost analysis, input-output models, economic forecasting models, econometric models, case studies, surveys, real estate market analysis and fiscal impact analysis (Cambridge Systematics, 1998; Weisbrod, 2000; O’Fallon, 2003).
The transportation improvement objectives used in the Encyclopedia were selected to reflect different perspectives and priorities. For example, one planning process or stakeholder group may be most interested in congestion reduction and safety benefits, while another may be most concerned with consumer choice and environmental protection. As a result, the categories that are used are not mutually exclusive: they may overlap. For example, traffic congestion reduction is an objective in itself and can also affect environmental protection, road safety and community livability. If a benefit-cost analysis is used it is important to take such overlaps into account to avoid double-counting.
Transportation planning frequently involves a choice between highway or parking facility capacity expansion, and a TDM solution. Below are some common errors that made when evaluating and comparing such options.
·
Ignoring parking costs. Economic analysis of
highways often ignores parking cost savings when calculating the benefits of
reduced driving (Parking Pricing). This underestimates
the financial benefits to consumers of using alternative modes.
·
Ignoring vehicle ownership and distance-based
depreciation costs. Transportation economic Models
often consider only out-of-pocket costs such as fuel, tolls and parking fees
when calculating the cost of driving (Transportation Costs
& Benefits). This underestimates the financial benefits to consumers of
using alternative modes.
·
Ignoring safety benefits. Economic
analysis often ignores potential reductions in crash costs that result from
reduced driving (Safety Impacts of TDM). This
underestimates the benefits to society of using alternative modes.
·
Comparing average rather than marginal costs. When comparing
automobile and transit investments to address urban transportation problems, some
analysts use overall average costs. But automobile costs are much higher than
average in urban conditions, while public transit service tends to be most cost
effective in these conditions due to economies of scale.
·
Ignoring generated traffic impacts. Failure to
consider the effects of generated traffic tends to overstate the benefits of
highway capacity expansion and understate the benefits of TDM solutions,
particularly pricing strategies (Rebound Effects).
·
Ignoring impacts on non-drivers. Transportation
planning is often made primarily from a motorist’s perspective, with little
consideration of impacts on non-drivers. The negative impacts of increased
vehicle traffic and automobile-oriented land use are often ignored (see Evaluating Nonmotorized Transport).
·
Ignoring transportation choice benefits. There are
several benefits to having a diverse and balanced transportation system, some
of which are difficult to measure (Evaluating
Transportation Options). Conventional transportation evaluation tends to
undervalue such benefits. TDM evaluation that has the sole objective of
reducing vehicle travel will also undervalue these mobility benefits (Evaluating Public Transit).
·
Ignoring strategic land use objectives. Transportation
decisions can have significant impacts on land use (Land
Use Impacts on Transportation). Increased road and parking capacity tends
to create lower-density, automobile-dependent land use patterns. Transportation
planners often ignore strategic land use objectives when evaluating options.
·
Treating travel demand as
an uncontrollable. Transportation planners often treat demand as a
point value rather than a function. For example, they say that vehicle travel
is projected to increase by X% over the next decade. Yet, travel demand is
affected by prices, land use patterns and other incentives. Expanding roadway
system capacity to accommodate projected growth, without considering demand
management options, can create a self-fulfilling prophecy of increased Automobile Dependency (Newman and Kenworthy, 1999).
·
Ignoring synergistic effects of TDM. A transit option
that does not appear justified under current conditions may become cost
effective if implemented as part of a coordinated TDM program. For example, a
transit service may become more cost effective if implemented with Commute Trip Reduction programs, Congestion
Pricing, Parking Management and Location
Efficient Development.
·
Ignoring congestion impacts. Expanding
highway capacity tends to increase downstream traffic Congestion
(congestion on surface streets and other highways), which is avoided when
travel is shifted to alternative modes. Construction projects often impose
significant traffic delay (McCann, et al, 1999). Increased transit speeds tend
to reduce traffic congestion on parallel highways. These impacts are often
ignored in transportation project evaluation.
·
Mixing equity and efficiency objectives. Alternative
modes are subsidized for both equity and efficiency objectives (Evaluating Public Transit). As a result, some improvements
to alternative modes may appear inefficient (e.g., off-peak service,
accommodating people with disabilities), while others may appear to be
inequitable (e.g., premium rail service designed to attract commuters out of
their cars).
Logic models are an evaluation framework commonly used in the social sciences (Israel, 2001; Taylor-Powell, 1998). They use diagrams that show the major components of a program, with arrows illustrating relationships between input, outputs and outcomes. Logic models also include a narrative that explains the relationships between these components and identifies external factors that can affect the program's effectiveness. A Logic Model helps answer questions such as, “What is this program trying to achieve and why is it important?” and “How will we measure effectiveness?” The answers can help meet accountability requirements and identify ways to improve the program.
|
Inputs What
we invest |
==> |
Outputs What
we do; Who we reach |
==> |
Outcomes What
difference it makes |
The steps involved in creating such a framework are described below.
1. The first step is to describe the problem that the program is intended to address and collect information about it. It is important to understand the problem from clients’ perspective and factors that affect the problem. For example, traffic risk can be evaluated in several different ways which give very different conclusions about the nature of the problem (Safety Evaluation). It can be measured per vehicle-mile, per passenger-mile, per motor vehicle, or per capita. Crash costs can be quantified based only on direct monetary losses, or including indirect and non-market costs. Traffic risk can be viewed from the perspective of vehicle drivers, vehicle passengers, cyclists and pedestrians. It can be viewed in terms of risk borne, risk imposed, or total risk. Many factors affect the degree of traffic risk, including vehicle type, demographics, driver behavior, roadway design and travel conditions, all of which must be understood for effective planning and evaluation.
2. The second step is to identify the major components of the program’s outcomes, including long-, medium- and short-term effects. Long-term outcomes might include changes in social, economic, and environmental conditions. For example, one long-term, social outcome for a traffic safety program is improved public health (fewer injuries) in an area. A long-term, economic outcome might be a reduction in health care costs.
Intermediate outcomes usually include the adoption of best management practices (BMPs) and appropriate technologies, and combinations or sets of practices and technologies. For example, a traffic safety program might include various management strategies to reduce high risk driving behavior and increase the use of safety equipment. Short-term outcomes may be changes in knowledge, attitudes, and skills, such as increased public awareness of the benefits of reducing high-risk behavior (not driving drunk, controlling traffic speeds) and using safety equipment (seatbelts, child restraints and bicycle helmets).
For many programs, some audience segments may have outcomes different from other groups. This is because needs vary: one group of clients need information on one topic, a second group needs information on a related but different topic, and a third group may need information on an array of topics. In this situation, developing a logic model for each group can help focus the program to deliver the needed information to the appropriate group.
3. The third step in creating a logic model is to organize the outcomes in a sequence or chain of events and to identify external factors which can hinder or facilitate the program. This reflects expectations about cause and effect relationships between program activities and short-term, intermediate and long-term outcomes. For some programs, the linkage between program activities and outcomes also may include feedback loops.
4. The fourth step in developing a logic model is to specify the process theory. The process theory has two main components: the program's service utilization plan and its organizational plan. The service utilization plan is a flowchart that shows how clients (or specific groups of clients) become engaged in the program's activities. The key idea is to describe how the program involves the client from his or her perspective. This includes indicating the initial contact with the client to recruit him or her to participate in the program, the set of activities through which the client obtains information, and follow-up activities which reinforce the educational process and encourage adoption of BMPs and technologies. The service utilization plan should answer the question about whether the program engages the client in a way that is sufficient to initiate the sequence of outcomes specified in the impact theory.
The program's organizational plan includes the major components or factors involved in the program. It also indicates how resources (e.g., curriculum, publications, expense money, specialized equipment, and personnel) are obtained and deployed, as well as relationships among key actors. Having adequate resources and an effective organization are important factors in delivering a high quality program to clients. These details should be identified in an accompanying narrative. In sum, the development of the process theory can be used as a blueprint for the plan of action. It identifies which faculty are to conduct specific activities and what sequence of activities should be conducted.
The fourth step is the review and consultation process. Though the initial development of logic models can be quickly completed by a small group of individuals, much can be gained by involving the full membership of design teams, collaborating county and state faculty, interested administrators, and external peers. Broad-based involvement helps to ensure that the model is correctly specified and based on relevant research. More importantly, participants will be more likely to share a commitment to the program's objectives and activities, even if these may lie outside his or her expertise.
For logic models to serve a useful function, it is important to begin by specifying the program's desired outcomes and then work back. Starting with the program's current activities can lead to maintaining the status quo instead of engaging in a careful, research-based discussion of the rationale for the program. Creating a logic model helps faculty to focus the educational program on generating outcomes for clients and including the necessary components for their attainment. With the completion of a detailed logic model, faculty can be confident that their efforts will be effective and their resources well spent. The time spent developing a logic model should be viewed as an investment rather than an expense. Given the public's expectations for performance, faculty can ill afford not to use logic models as a tool for program planning.
Conventional transport planning tends to use a reductionist approach that attempts to identify one or two best solutions to an individual problem, often with little consideration to indirect impacts, as illustrated in Table 5.
Table 5 Conventional Evaluation
|
|
Congestion |
Parking |
Crashes |
Pollution |
|
Conventional
Solutions |
|
|
|
|
|
Roadway capacity expansion |
X |
|
|
|
|
Parking capacity expansion |
|
X |
|
|
|
Crash-resistant vehicles |
|
|
X |
|
|
Vehicle emission controls |
|
|
|
X |
|
TDM
Strategies |
|
|
|
|
|
Road pricing |
X |
|
|
|
|
Parking management |
|
X |
|
|
|
PAYD insurance |
|
|
X |
|
|
Emission pricing |
|
|
|
X |
Conventional planning tends to evaluate individual problems and solutions. For example, roadway capacity expansion and road pricing are considered solutions to congestion problems, parking capacity expansion and parking management are considered solutions to parking problems, crash-resistant vehicles and PAYD Insurance are considered solutions to crash costs, and vehicle emission controls and emission pricing are considered solutions to pollution problems.
Table 6 illustrates a more comprehensive evaluation approach. It shows that conventional solutions, such as roadway and parking facility capacity expansion, crash-resistant vehicles and emission controls generally only help solve one or two problems at a time. In fact, they sometimes exacerbate other problems by increasing total automobile travel (Litman, 2004). On the other hand, TDM strategies often provide multiple benefits because they reduce total vehicle travel. Although individually their impacts may appear modest, a comprehensive TDM program that includes a variety of complementary strategies can have a significant impact on total travel, providing significant overall benefits.
Table 6 Comprehensive Evaluation
|
|
Congestion |
Parking |
Crashes |
Pollution |
|
Conventional
Solutions |
|
|
|
|
|
Roadway capacity expansion |
X |
|
|
|
|
Parking capacity expansion |
|
X |
|
|
|
Crash-proof vehicles |
|
|
X |
|
|
Vehicle emission controls |
|
|
|
X |
|
TDM
Strategies |
|
|
|
|
|
Road pricing |
X |
X |
X |
X |
|
Parking management |
X |
X |
X |
X |
|
PAYD insurance |
X |
X |
X |
X |
|
Emission pricing |
X |
X |
X |
X |
Comprehensive evaluation takes into account additional benefits that can result from TDM strategies that reduce total motor vehicle travel. As a result, their total benefits are greater than indicated by conventional planning practices.
For information on how to apply transportation economic evaluation see NHI, 1995; FHWA, 1998; Small, 1999; Schreffler, 2000; Litman, 2001 and 2006; ACT, 2001 and ICF Consulting and CUTR, 2005. Below is a list of best practices for accurate TDM evaluation.
·
Use best current transport Modeling
practices.
·
Use Accessibility as the ultimate goal of
transportation improvements, rather than treating mobility as an end in
itself. This allows consideration of the widest possible range of solutions to
transportation problems, including mobility substitutes and land use management
that reduces the need for physical travel.
·
Clearly define the Base Case and alternatives
that are used to calculate incremental costs and benefits.
·
Carefully define incremental costs. Identify
the marginal costs of driving and alternative modes. Assign roadway capacity
expansion costs only to peak-period vehicle users.
·
Use comprehensive estimates of costs and
benefits, including indirect and long-term impacts. This should include all
road and parking expenses, downstream congestion, impacts on nonmotorized
transport, vehicle ownership costs, environmental impacts, impacts on travel
choice and strategic land use objectives.
·
Present results in units that are easy to understand
and compare. For example, present costs and benefits in annualized dollars per
capita, per vehicle, per vehicle-mile, per passenger-mile, or per additional
vehicle trip.
·
Indicate any impacts that are not quantified in the
analysis because they are difficult to measure, and describe their impacts
qualitatively. For example, describe how each option impacts equity objectives,
economic development, and strategic land use goals.
·
Use consumer surplus analysis rather than
travel-time cost values to calculate consumer impacts of changes in route, mode
and trip frequency. Do not assume that reduced mobility or travel speeds
resulting from a voluntary change in travel patterns reflects increased
consumer costs.
·
Incorporate generated traffic impacts.
·
Indicate the distribution of benefits and costs, and
evaluate impacts in terms of equity objectives.
·
Use sensitivity analysis and other statistical
techniques to explicitly incorporate uncertainty and variability in economic
analysis.
·
Describe how different perspectives and assumptions
could effect analysis conclusions.
·
Produce reports that are understandable to a general
audience and include all relevant technical information.
|
According to Einstein’s theory, our perception of every other object
in the universe is relative to our own movement. Motorists demonstrate this
every day: An idiot is somebody who drives faster than you. A moron is
somebody who drives slower than you. |
Ker (2005) investigated the cost effectiveness of community-based programs that promote travel behavior change. He found that such programs can be highly-effective in increasing public transport use, as well as use of other alternatives to the private car. The majority of these increases have been off-peak, so do not require investment in additional public transit infrastructure or vehicles. However, some system improvement at the same time has been demonstrated to improve the impact of travel behaviour change programs on the level of public transport use.
Community/household-based travel behaviour change
interventions have consistently delivered 15 to 40 additional public transport
trips per person per year, across the whole target population, irrespective of
the current level of public transport usage. In relative terms, the highest
proportionate gains in public transport mode share have been where the existing
mode share was low. This level of behaviour change will typically generate
sufficient additional fare revenue to recover the full cost of the intervention
in two to five years. In the specific case of
Even where additional capacity might be required,
voluntary travel behaviour change is a highly cost-effective means of achieving
progress towards Government strategy targets of reduced dependence on cars and
increased use of public transport and other non-car travel options.
There are also substantial financial benefits to
government beyond public transport, most particularly through reduced demand
for additional road system capacity and lower health service costs. These alone
have been estimated to have a value of between 1.6 and 3.2 times the initial
investment in travel behaviour change.
Community/household-based travel behaviour change interventions have been very positively regarded by those who participate and have delivered substantial improvements in public perceptions of public transport, including changes that have occurred in recent years. In turn, these improved perceptions have been reflected in higher anticipation of further improvements.
The New Jersey Department of Transportation developed
an interactive GIS-based tool for calculating network-wide full marginal costs
(FMC) of highway transportation in
The
report, Sustaining Nature and Community
in the Pikes Peak Region: A Sourcebook for Analyzing Regional Cumulative
Effects (CDOT, 2003) examines past, present and foreseeable environmental
impacts and trends in order to provide a framework for project-level assessment
of cumulative effects in the region. The guidebook provides detailed analysis
of landscape patterns, water quality and quantity, air quality, noise and
visual resources, and guidance on evaluating the impacts of specific projects,
particularly those that expand highway capacity.
SPECTRUM is a project funded by the EU as part of
Fifth Framework Programme. The main objective of the SPECTRUM project is to:
“develop a theoretically sound framework for defining combinations of economic
instruments, regulatory and physical measures in reaching the broad aims set by
transport and other relevant policies” in terms of efficiency and equity. As
there is a tension between managing the transport system in such a way as to
minimise social costs and simultaneously managing the system to meet increased
demand, the work of SPECTRUM will address this problem by looking at the
potential effects of using either individual instruments, complementary
packages of instruments, or the consequences of substituting instruments, in
managing the transport system.
For more information on the concepts and techniques discussed in this chapter see TDM Planning, Why TDM?, Measuring Transportation, Market Principles, Comprehensive Transportation Planning, Evaluating TDM Equity, Parking Evaluation, Evaluating Pricing Strategies, Evaluating Transportation Choice, Transit Evaluation and Data Collection.
AASHTO (2003), User Benefit Analysis for Highways, American Association of State Highway Officials (www.aashto.org).
ACT (2001), Transportation Demand Management Tool Kit, Association for Commuter Transportation (www.actweb.org).
Brian Alstadt and Glen Weisbrod (2008), Generalized Approach for Assessing Direct
User Impacts of Multimodal Transport Projects, Transportation Research Board 87th Annual Meeting (www.trb.org).
Auditor General (2003), “Road Transportation in Urban Areas: Accountability for
Reducing Greenhouse Gases,” 2003 Report of the Commissioner of the
Environment and Sustainable Development, Office of the Auditor General of
A. Bhasin (2005), Multi-Criteria Analysis for Infrastructure Appraisal, Transportation Research Board 84th Annual Meeting (www.trb.org).
Robert Burchell, et al (1998), The Costs of Sprawl – Revisited, TCRP Report 39, Transportation Research Board (www.trb.org).
Sally
Caltrans (2004), Benefit-Cost Analysis Guide, Office of Transportation
Economics, California Department of Transportation (www.dot.ca.gov/hq/tpp/offices/ote/benefit_cost/models/calbc.html).
CDOT (2003), Sustaining Nature And Community In The Pikes Peak Region: A Sourcebook For Analyzing Regional Cumulative Effects, Colorado Department of Transportation (www.dot.state.co.us).
Center for Transportation Excellence (www.cfte.org) provide research materials, strategies and other resources for evaluating public transportation benefits.
CH2M Hill (2000), Technologies to Improve Consideration of Environmental Concerns in Transportation Decisions, National Cooperative Highway Research Program, Transportation Research Board, Project 25-22, (http://gulliver.trb.org/publications/nchrp/cd-14).
CIESIN (1995), Thematic Guide to Integrated Assessment Modeling of Climate Change, Center for International Earth Science Information Network, University Center, Michigan (http://sedac.ciesin.org/mva/iamcc.tg/TGHP.html).
Community Impact Assessment Website (www.ciatrans.net), sponsored by the U.S.