Transportation facilities and services represent significant public investment and can result in a variety of economic impacts. Economic studies are frequently incorporated in decision making, planning, and programming processes at statewide, MPO (Metropolitan Planning Organization) and local levels. It is therefore critical that the appropriate tools, assumptions and methods are used to produce these economic analyses.
Although economics is a well developed field, many terms and concepts are used inconsistently. Economic analysis encompasses many different activities and products. Professional economists sometimes disagree with each other, may differ in their use of terminology, or they may emphasize different aspects in the analysis of an economic problem.
For example, the term “economic development” could mean the development of a specific parcel of land, such as the construction of a new supermarket, or it could mean a sustained increase in Gross State Product for an entire state. The approach to an economic analysis may vary depending on the planning time horizon. Economic analysis can inform decisions related to project scheduling and sequencing in the short term (< 5 years), but it may take 10 or more years for many other economic factors, such as the employment composition of a metropolitan area, to show a change.
Planners and other transportation professionals typically have little formal training in economics, and they have few opportunities to develop expertise in economic vocabulary and concepts. This often serves to limit the application of economic analysis in transportation planning and programming and it can make serving as a project manager for an economic study challenging and difficult.
The objective of this research is to provide guidance to the transportation planner that is charged with developing, implementing, evaluating and communicating an economic analysis of a transportation investment. This research focuses on economic analytical techniques applied at both the broader planning level and at the project level. The results of this research are presented in the form of a guidebook that provides planning and other transportation professionals with an economic knowledge base that enables them to serve as a project manager for an economic analysis. The guidebook:
1. Provides a primer on basic economic terminology as it applies to transportation.
2. Explores the linkage between planning activities and economic analysis, and how economic analysis and results can be integrated into planning activities.
3. Provides guidance for developing an economic study.