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SHRP 2 L35 [Pending]

Local Methods for Modeling, Economic Evaluation, Justification and Use of the Value of Travel Time Reliability in Transportation Decision Making

  Project Data
Funds: $800,000
Contract Time: 14 months
Staff Responsibility: Stephen Andrle

Project snapshot. More details below.

Products
(Project Number)
Impact on Practice
Product Status
LOCAL METHODS FOR MODELING, ECONOMIC EVALUATION, JUSTIFICATION AND USE OF THE VALUE OF TRAVEL TIME RELIABILITY IN TRANSPORTATION DECISION MAKING (L35)

A final report on the step-by-step process used to develop, justify, apply, and assess the use of the value of travel time reliability in project evaluation and decision processes.
This project will build support for investments in operations thru pilot testing a reliability performance metric or an economic value of travel time reliability and incorporating it into the analysis of investment alternatives at an agency level. As a result, this project will shed light on how potential investments in operations may be undervalued.
The project is slated for completion by summer of 2014 with a final report due in the fall of 2014.

SHRP 2 Background
 
To address the challenges of moving people and goods efficiently and safely on the nation’s highways, Congress has created the second Strategic Highway Research Program (SHRP 2). SHRP 2 is a targeted, short-term research program carried out through competitively awarded contracts to qualified researchers in the academic, private, and public sectors. SHRP 2 addresses four strategic focus areas: the role of human behavior in highway safety (Safety); rapid highway renewal (Renewal); improved travel time reliability through congestion reduction (Reliability); and transportation planning that better integrates community, economic, and environmental considerations into new highway capacity (Capacity). Under current legislative provisions, SHRP 2 will receive approximately $150 million with total program duration of 7 years. Additional information about SHRP 2 can be found on the program’s Web site at www.trb.org/shrp2.
 
Reliability Focus Area
 
The major objective of SHRP 2 Reliability research is to greatly improve the reliability of highway travel times by reducing the frequency and effects of events that cause travel times to fluctuate in an unpredictable manner. The results of the research program should help local, state, and national agencies reduce travel time variability for travelers and shippers. The Reliability research plan addresses both recurring and nonrecurring congestion with an emphasis on nonrecurring congestion. The following seven potential sources of unreliable travel times (i.e., events that cause variable travel times) were identified:

-        traffic incidents
-        work zones
-        demand fluctuations
-        special events
-        traffic control devices
-        weather
-        and inadequate base capacity
 
The Reliability focus area targets travel time variation—that frustrating characteristic of the transportation system that means you must allow an hour to make a trip that normally takes 30 minutes. Not only is reliability an important component for travelers and shippers, it is also an aspect of the congestion problem in which transportation agencies can make significant gains even as travel demand grows. The seven sources of unreliability account for approximately half of the total delay. Reducing reliability-related delay will also result in fewer crashes, reduced vehicle emissions and fuel use, and other benefits. These benefits can be realized through a mix of leading-edge research into a better understanding of strategies and their consequences, new technology and practices, and reducing institutional barriers so that our existing knowledge can be more fully exploited.
 
The goals of the Reliability focus area are built around the first five of the seven sources mentioned above. Work on weather-related issues will be coordinated with the Road Weather Management R&D program under way at the Federal Highway Administration. Related research on inadequate base capacity being undertaken in the SHRP 2 Capacity focus area and elsewhere will be closely coordinated by SHRP 2 staff.

Project Background
Reliability has most often been considered qualitatively and is associated with the statistical concept of variability. Travelers recognize the variability in their trips and account for it by building in “buffers” as insurance against late arrival. This action implies that the consequence of arriving late is costly and should be avoided, but arriving early is also costly because it implies waiting. Efficiency and productivity lost in these buffers or safety margins represent an additional cost that travelers absorb.

Attribution of an economic value to travel time reliability recognizes that transportation agencies can create more value than they have traditionally realized when they invest to reduce congestion if an improvement in reliability is produced independent of an improvement (reduction) in travel time. Usually, only the dollar value of time saved is used in calculating benefits. If there is an additive benefit (no double counting) from the value of reliability, then investments may have been undervalued. Going forward, some investments in congestion reduction may turn out to be more valuable than previously recognized and thus justify larger investments. The value of reliability is most apparent for traffic operations strategies that directly address the disruptions that cause unreliable travel.

This issue is important because the nation needs to improve the productivity of its transportation network since it is progressively more difficult to expand it. There is reason to believe that operations projects have high value, in part because of improved reliability. When referring to “operational investments” we are referring to investments that maximize the availability and use (productivity) of the transportation system’s existing capacity. Some examples include:

• Managed lanes, both converted and added
• Active traffic management
• Lane controls
• Reversible lanes
• Traveler information
• Geometric improvements to reduce bottlenecks
• Increasing investment in incident management (more frequent, improved training, more personnel)
• Traffic management systems (detectors, VMS, network, software etc.)
In order to properly consider such investments in the resource allocation decision process, they must be included in the investment tradeoff analysis.  

Many places in the world recognize that travel time reliability has value and some incorporate it into analysis, but there is very little actual use of the value of travel time reliability (VTTR) in the United States.  Building support for investments in operations is sometimes difficult, because few if any agencies include a reliability performance metric or an economic VTTR in the analysis of alternatives. As a result, potential investment in operations may be undervalued.

The purpose of this project is to introduce the economic value of travel time reliability into practice, test it, and provide public agencies with examples of step-by-step procedures on how to incorporate and justify the VTTR into decision making. 

Applying reliability valuation in economic analyses of transportation projects requires the following steps:

• A measure for travel time reliability;
• A value (or values) for travel time reliability (See Special Note B);
• A method for analyzing alternatives and predicting future reliability that is sensitive to the changes in reliability due to an improvement.

Introducing a new category of benefit for road improvements could be controversial. It is important to consider the matter in an actual decision-making context, establish a local method for deriving and accepting a value, and testing to see if and how it affects decisions.  In this request for proposals, SHRP 2 is asking transportation agencies to test and evaluate this procedure. A public agency with decision authority must play an important role in the proposal. There will be from 2 to 4 awards so that different methods and circumstances can be investigated.

Public agencies may team with consulting firms or universities to carry out this work, but the public agency must be involved in the technical work and decision making with respect to using a value of travel time and a reliability performance measure.

Project Objectives

1. Select and defend a value or range of values for travel time reliability for the roadway network in the jurisdiction included in this proposal.
2. Use the VTTR in an established process to prioritize operational and capital improvements in the jurisdiction included in this proposal and determine if (and how) the ranking of projects changes due to the addition of VTTR.
3. Report for the benefit of others the step-by-step process used to develop, justify, apply, and assess the use of a VTTR in project evaluation and decision processes.

Evaluation Criteria for L35

The Expert Task Group that developed this RFP has established evaluation criteria for this project over and above the criteria stated in General Note 1. Unless these conditions are present, it will be very difficult to meet the objectives of the project. In your proposal, please address how your agency meets these criteria.

o A value of travel time (VOT) should already be established for analytical work, or development of a value should be under way.  This is important because the value of travel time reliability is often expressed as a function of the value of travel time itself, and this project is focused on adding VTTR to an analysis using VOT.  
o A life-cycle benefit/cost framework should be in place so that improvements of different lives can be compared and services (e.g., highway helper service) can be compared to capital investments.
o The jurisdiction included in this proposal must have access to data sources to calculate a reliability performance measure and a local value of travel time reliability.
o You must be able to forecast future travel time reliability in some way so the reliability component of future benefits can be estimated.   
 
Tasks
Task descriptions are intended to provide a framework for conducting the research. SHRP 2 is seeking the insights of proposers on how best to achieve the research objectives for this project. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time. Proposals must present the proposers’ current thinking in sufficient detail to demonstrate their understanding of the issues and the soundness of their approach to meeting the research objectives. Proposers should clearly describe how they will accomplish each task. Tasks for this project are not necessarily sequential; some tasks can and should be done in parallel.

Task reports are requested. In order to minimize editing near the end of the project it is suggested that you outline your final report near the beginning and write task reports following that outline. 

Task 1: Describe how your established processes to prioritize operational and capital improvements (baseline approach) meet the special evaluation criteria for this project. This includes analytical methods used to obtain performance metrics and a prioritization/evaluation process. 

Task 2: Develop and apply a methodology to select a travel time reliability performance measure and a value or range of values for travel time reliability. In your proposal, describe how you will do this. See Special Notes. Submit a Task 1 & 2 report.

Task 3: Incorporate this performance measure and the value of travel time reliability into your project evaluation process and use that information to inform policy decisions about transportation alternatives. Prepare a Task 3 report.
 
Task 4: Analyze and compare alternatives using the baseline approach and the revised method that includes VTTR. SHRP 2 is particularly interested in learning if the use of a reliability measure leads you to consider different investments.
Note: You must include operational investments among the options being considered and analyze them jointly with infrastructure investments.

Task 5: Explore the sensitivity of priorities to changes/ranges of the VTTR. Prepare a Task 4 & 5 report.

Task 6. Brief your management and/ or policy board on the results of Tasks 4 and 5 and assess the reaction of members. Do they find the results understandable, credible, useful, and/or advantageous in contrast to the usual approach to project evaluation? Are investment decisions sensitive to the use of a travel time reliability performance measure and an associated value of travel time reliability?   Do they believe that this approach will stand up to public scrutiny? Note: reviewers will find it advantageous if the proposing agency can actually carry these measures through the project selection process.

Prepare a Task 6 report.

Task 7. Prepare a Draft Final Report. This report should include the lessons learned from tasks 1-6 and should specifically include the following:

    a. Documentation of the step-by-step methods used to develop and justify a local value of travel time reliability
    b. Assessment of whether adding travel time reliability to analyses changes investment priorities or affects the case for using operations strategies to meet transportation goals.
    c. Evaluation of whether introducing reliability leads to changes in the types of investments considered.
    d. Assessment of whether this approach is likely to broaden the set of options considered to solve existing problems.

Submit the draft report to SHRP 2 for review and comment.

Task 8: Final report. Revise the draft and submit a final report.

 
Deliverables
     1. Task 1 & 2 report
     2. Task 3 report
     3. Task 4 & 5 report
     4. Task 6 report
     5. Draft Final report
     6. Final report

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