California Department of Transportation

Life-Cycle Benefit-Cost Analysis
Economic Parameters 2012

The Economics Analysis Branch utilizes standard economic valuations for application in benefit-cost analysis. These values are used consistently across the Cal-B/C Framework, which includes the Cal-B/C V5.0 and Cal-B/C Corridor . The values are recommended for use in economic analysis on all modes, including highway, rail and transit projects. The economic values represent statewide averages.

Travel Time Parameters

Discount Rate Percent
Real* (Inflation Adjusted) 4.0
   
Value of Time Dollars Per Person Hours
   
Automobile  $12.50
Truck  $28.70
Auto/Truck Composite (Weighted-Average)  $17.35
Transit (in vehicle)  $12.50
Transit (out of vehicle)  $25.00
Average Vehicle Occupancy Rate 1.15

Vehicle Operating Cost Parameters

Average Fuel Price Dollars Per Gallon
Regular Unleaded (auto) $3.714
Disesel (truck) $3.941
   
Fuel Price (excluding taxes) Dollars Per Gallon
Regular Unleaded (auto)  $2.85
Diesel (truck)  $3.15
   
Non-Fuel Costs Dollars Per Mile
Automobile  $0.303
Truck  $0.418

Accident Cost Parameters

Cost of Highway Accident Dollars Per Accident
Fatal Accident  $4,800,000
Injury Accident  $67,400
Property Damage Only (PDO) Accident  $10,200
Average Cost per Accident  $52,500
   
Cost of an Event Dollars Per Event
Cost of a Fatality
 $4,400,000
   
Cost of an Injury  
Level A (Severe)  $221,400
Level B (Moderate)  $56,500
Level C (Minor)  $26,900
Cost of Property Damage  $2,500

Emissions Cost Parameters

Health Cost of Transportation Emissions Dollars Per U.S. Ton
   
Pollutant
L.A./South Coast
CA Urban Area
CA Rural Area
Carbon Monoxide (CO)
$145
$75
$70
Nitrogen Oxide (NOx)
$59,100
$17,300
$12,900
Particular Matter (PM10)
 $484,300
$139,900
$99,700
Sulfur Oxide (SOx)
$182,000
$69,800
$50,400
Volatile Organic Compounds (VOC)
$3,675
$1,210
$950
   
Greenhouse Gases (CO2e)**
$23

*The Cal-B/C Framework is setup to evaluate costs and benefits in constant dollars without escalating future values.
**The Cal-B/C Framework includes a two-percent "uprating" factor, so that subsequent years reflect the increasing values. This approach is consistent with Interagency Working Group on Social Cost of Carbon, United States Government,2010.

Measuring Economic Productivity Gains

Standard benefit-cost analysis captures user benefits (cost savings) rather than broader economic impacts of transportation improvement projects. The primary user benefit (cost) is the travel time savings valued using average labor earnings. Caltrans is proposing to measure economic productivity gains from improved mobility using statewide average hourly output per worker (value added to Gross State Product) as the opportunity cost of labor. This information is presented here to elicit user input and discussion on the merit of the methodology, and spur professional discourse pertaining to economic productivity analysis in the benefit-cost process.

Methodology

Opportunity Cost of Labor (hourly) = CA Labor Productivity / Average Work Hours Per Year * 0.70

Based on the National Household Travel Survey 2001, approximately 70 percent of Total Vehicle Miles Traveled is related to economic activity.Caltrans is seeking input and discussion on this proposed approach or other approaches available. If you would like to provide comments or feedback, please contact Barry Padilla at barry_padilla@dot.ca.gov.

Other Impacts

The Cal-B/C Framework, as a standard benefit-cost approach, focuses on estimating travel time savings, vehicle operating cost savings, safety savings and vehicle emissions savings. The Framework offers a simple, practical method for preparing economic evaluations on prospective highway, rail and transit improvement projects. For individuals interested in non-traditional impacts, such as noise and land use, we provide the following links with information on some other impacts from transportation improvements:

 

Caltrans is providing this information solely for user consideration and does not endorse the opinions or values provided.