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Benefits

The benefits of transportation projects are commonly defined as reductions in transportation costs. However, on this website, benefits are defined as all of the effects of the project/program on its users or the society at large, even those effects that are negative (sometimes referred to as disbenefits). Benefits and disbenefits are measurable and have economic value.

These are the benefits most commonly considered in benefit-cost analysis of transportation projects:

• Travel time or delay reductions
• Accident reduction
• Emissions reductions
• Vehicle operating cost reduction

Note that all of these benefits are actually reductions in the costs of transportation.

Other effects are difficult to value but may still be considered in an analysis in which they are considered critical to making the choice among alternatives:

• Induced Travel, including new trips and changes in mode, route, and time of travel
• Noise effects
• Construction disbenefits
• Habitat and water quality impacts
• Economic effects
• Community impacts

Benefit-cost analysis does not generally include economic impact analysis, which is the study of all the indirect economic impacts of a project on the economy, including jobs and other impacts of construction. Also, it generally does not include minor impacts that are identified in an environmental impact study.

Note that resources used to mitigate adverse environmental or community effects are part of project costs. However, if the remaining effects are still significant, they should be included in the analysis as negative benefits. Conversely, if previously existing conditions are significantly over-mitigated, these can count as positive benefits.

The Calculations section of this website explains how to deal with inflation, discounting of future benefits, as well as how to handle joint costs, sunk costs, and transfer payments and avoid double-counting

 

Acknowledgements

Hosted by the Caltrans Office of Transportation Economics

Created by the California Center for Innovative Transportation at the Institute of Transportation Studies at the University of California at Berkeley and the Committee on Planning and Economics of the American Society of Civil Engineers

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