California Department of Transportation
Caltrans Transportation Planning Planning Offices Office of Transportation Economics Benefit-Cost Analysis Presentation of Results

Presentation of Results

Clarity and credibility should be the goals of the presentation. Because benefit-cost analysis is sometimes used to justify rather than evaluate a project by overstating benefits, understating costs, or using inappropriate alternatives, decision-makers and the general public are often skeptical about its validity and value. Therefore, the presentation should:

  • Clearly state the purpose of the analysis. What decision is it intended to inform? Will the decision be made solely on the basis of the benefit-cost analysis or will there be other important considerations not included in the analysis, such as economic impacts on the community?
  • Provide a clear description of alternatives and the measures used to evaluate them.
  • Compare the benefit-cost measures for all alternatives.
  • Highlight the costs and benefits that most affected differences between alternatives.

Sensitivity analysis should be used to test the sensitivity of results to different assumptions about benefits and costs; the results should be included in the final report. If there are significant differences in rankings as a result of uncertain estimates, then ranges can be presented. In some cases making the spreadsheets used for the analysis available to interested parties so that they can modify assumptions may enhance the credibility of the findings.

The presentation is as important as the analysis itself. If the benefit-cost analysis is executed and documented with an eye toward its purpose and eventual presentation, the presentation will be better as well as easier to prepare.

Presentation Content

The presentation content will vary with the audience. Below is a table showing typical audiences and the type of information that is generally appropriate to each. This is only a guide; a presentation should contain as much information as would be of interest to and understood by each audience.

Presentation Content for Different Audiences

 
Type of Information
Client
Decision Makers
Interested Public/Stakeholders
General Public
Decision to be made
X
X
X
X
Description of alternatives
X
X
X
X
Comparison of measures for each alternative
X
X
X
X
Range of uncertainty in comparison
X
X
X
Benefits and costs considered
X
X
X
Importance of each benefit and cost to the result
X
X
X
Discount rate
X
Geographic and temporal scope of analysis
X
Key assumptions
X
X
X
All assumptions
X
Sensitivity of results to uncertainty in cost and benefit estimates and assumptions
X
X
X
Methods used to estimate costs and benefits
X
Impacts of benefits and costs on affected agencies and groups
X
X
Calculations/worksheets
X

 


Presentation Media

Presentation Media
Client
Decision Makers
Interested Public/Stakeholders
General Public
Press release
X
Summary of BC Analysis
X
X
X
Full report on BC Analysis
X
X
Oral presentations/workshops
X
X
Website containing summary, full report, and notice of any presentations/workshops
X
X
X
X
Detailed briefing
X
Mailed or emailed summaries, website URL, and notice of any presentations or workshops
X
X
X

Tables and Graphs for Presenting Benefit-Cost Information

These are often easier to use and understand than text. Below are a few examples.

Summary Table of Results

From the Cal-B/C model (http://www.dot.ca.gov/hq/tpp/offices/ote/benefit_files/Cal-BC.xls):

Life-Cycle Costs (mil. $)
$43.0
Life-Cycle Benefits (mil. $)
$55.0
Net Present Value (mil. $)
$12.0
Benefit / Cost Ratio:
1.3
Rate of Return on Investment:
6.0%
Payback Period:
21 years
Itemized Benefits (mil. $)1st Year 20 Years
Travel Time Savings$2.0 $3.0
Veh. Op. Cost Savings$0.1 $0.1
Accident Reductions$0.1 $0.1
Emission Reductions$0.3 $0.5
Total Benefits$2.5 $3.7

Table of Value of Time by User Type

From a Portland B-C study http://wwwcf.fhwa.dot.gov/planning/toolbox/portland_overview.htm):

 

Value of One Hour of Travel Time (1995 Dollars)
Auto
6-Tire Truck
3-4 Axle Truck
4-Axle Comb.
5-Axle Comb.
Source: Cambridge Systematics, Inc., U.S. Department of Transportation, and Highway Economic Requirements System (HERS).
Business Travel
In-Vehicle Value per Person
N/A
$16.50
$16.50
$16.50
$16.50
Avg. Vehicle Occupancy
N/A
1.05
1.0
1.12
1.12
Value per Vehicle
N/A
$2.65
$7.16
$6.41
$6.16
Value of Inventory
-
-
-
$0.60
$0.60
Personal Travel
In-Vehicle Value per Person
$8.50
-
-
-
-
Avg. Vehicle Occupancy
1.67
-
-
-
-
Avg. Value per Vehicle
$10.17
$19.98
$23.66
$25.49
$25.24
Avg. Value per Person
$8.50
$19.02
$23.66
$22.76
$22.54


The table was followed bv notes on how each entry was estimated.

Graphical Display of Benefit-Cost Relationships
The benefits and costs of 3 alternatives, A, B, and C, are plotted on a graph below, with benefits on the vertical axis and costs on the horizontal axis. A number of things can be illustrated with such a plot. The slope of the line through the origin and a project's benefit-cost point is its benefit-cost ratio; the project with the steepest slope has the highest ratio. The vertical intercept of a 45° line through the point is the benefit minus the cost (net present value). The project with the highest line has the greatest benefit minus cost. If some minimum benefit is required, projects with benefits below that minimum can be eliminated from consideration. Similarly, if funds are limited, projects with costs above the limit can be eliminated.

In this case project B has the highest benefit-cost ratio and the highest net present value and C the lowest.
A graph shows three projects: project B, which has high benefits and low costs; project A, which has lower benefits and slightly higher costs; and project C, which has benefits that are between projects A and B and costs that are higher than both projects.

The same type of plot can be used to display the level of uncertainty associated with each project. Vertical lines can be used to indicate the range of benefit estimates.

A graph shows three projects, labeled B, A, and C, which have progressively higher costs and lower benefits. However, a vertical line through project A indicates that it has the smallest range of possible benefits, making its outcome more certain.

In this case, A might be selected because there is less uncertainty regarding its benefits and there is a chance that the benefits of B might be lower than either A or C. If both benefits and costs are uncertain, then a rectangle could be drawn around each point.

Graphical Display of Benefit Uncertainty
The STEAM model developed by the FHMWA displays the likelihood of various benefit levels as a probability distribution as shown in the screen picture below.

Screenshot

 

 

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

Acknowledgements | Comments and Suggestions