The National Academies

NCHRP 20-24(80) [Final]

Assessing the Economic Benefit of Transportation Infrastructure Investment in a Mature Surface Transportation System
[ NCHRP 20-24 (Administration of Highway and Transportation Agencies) ]

  Project Data
Funds: $250,000
Research Agency: Cambridge Systematics
Principal Investigator: Susan Binder
Effective Date: 10/26/2011
Completion Date: 9/30/2013

Continuing discussions regarding Federal surface transportation legislation face tough funding decisions in generally difficult fiscal climate. With personal access and mobility for many people now ubiquitous, Middle America seems to take for granted that highway and transit services will be similarly available in the future. Past consensus as to the important role that government at all levels should play in putting and keeping in place well-performing systems is weakening in the face of concerns about long term debt and immediate deficits. 
The prospect for maintaining a predictable stream of Federal funding at levels many consider necessary to ensure the quality of our surface transportation system is unclear. Owners and operators of the surface transportation system ultimately need to consider, implement and manage a portfolio of strategies to deliver system performance that serves their constituents’ economy and population. Information for those who represent the users and beneficiaries of the system from an economic perspective will be critical to the debate.   Up-to-date analyses are needed to strengthen public understanding of the contribution of the nation’s surface transportation to national and regional economic well-being. 
Research is needed to demonstrate the relationship of modern transportation and economic vitality. At the core of such research is the critical distinction between strategic investment in transportation infrastructure (including features that improve operational efficiency) and short term expenditures.  The former represent the creation of capital goods that in turn yield future returns through economic growth. The latter bring value but represent immediate consumption and have more limited direct long-term benefit. Typica assessments of the investment contributions of transportation have been undertaken in the context of the original creation of a highway or transit system, for example. The continuing investment necessary to protect enduring yields (i.e., to meet classic engineering “needs”) have been studied in terms of “outputs” but not articulated in terms of the impacts on the economy of various levels of transportation services or “outcomes.”  The research should help decision makers and other stakeholders understand the national economic benefits of investments (or conversely, the opportunity costs of failing to make investments), particularly when these investments may preserve asset value, selectively enhance capacity, or introduce new technology to improve safety and relieve congestion, rather than create major new facilities.  
The objectives of this project were to (a) conduct an exploratory review of current understanding of the links between transportation and the health of the economy, taking into consideration recent international and domestic trends, (b) assess gaps in current understanding, and (c) outline a proposed design for a multi-phase program of economic research to clarify the importance of continuing transportation system investment in the United States economy. The ultimate goal of this larger program will be to inform decision makers at national, regional, state, and metropolitan levels as to the synergies and tradeoffs with regard to economic growth embodied in funding and financing surface transportation systems. 
The research team reviewed relevant literature—including the synthesis developed under NCHRP Project 8-36, Task 22, and reported in The Positive Impacts of Transportation Investment: Compilation of Working Papers—and evaluated the analytical bases for conclusions about the role of transportation investment in a relatively mature system. The team prepared a background paper for a workshop that was held in April 19, 2012, at the Bolger Center in Potomac, MD, to consider current knowledge and frame research questions to address key gaps in current knowledge. A report of that event and participants' discussions may be viewed by clicking here.   A final report presenting the contractor's assessment of research priorities and summarizing the background leading up to identification of those priorities may be downloaded by clicking here

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