State highway policy makers often request that state Departments of Transportation (DOTS) supply economic impact information regarding highway programs. Currently, most DOTs are unable to provide accurate assessments of this nature. Increasingly state DOTs are attempting to justify their budget requests by estimating the economic benefits of their proposed highway projects. The primary purpose of this paper is to present a model-procedure to measure some of the economic benefits of state highway programs. The model-procedure demonstrates how a state input-output model can be adjusted to measure the economic impacts of specific types of highway improvement. Fundamentally, the procedure involves adding a row and a column to the state input-output model for each highway improvement type, with data obtained by a survey of state highway construction firms. The paper details a ten step procedure to accomplish this task. The final step of the model-procedure is calculation of output, income, and employment multipliers by highway improvement type. The paper illustrates an application of the model-procedure using the state of Kansas as a case study. The Kansas study calculates output, income and employment multipliers for six different highway improvement types using a 68 sector, survey-based input-output model for the state of Kansas. The paper demonstrates how the model-procedure can be used by state DOTs to answer important highway policy questions. These include economic justification of the state highway program, the employment impact of the highway program, and measurement of the economic impact of alternative highway priorities. (A)
Abstract