COMPREHENSIVE FRAMEWORK FOR HIGHWAY ECONOMIC IMPACT ASSESSMENT: METHODS AND RESULTS

A framework for assessing economic impacts of highway improvements that is comprehensive in scope, diverse in methodology, and useful both for ranking needed improvements and in making investment decisions is presented. Current user benefit assessment techniques are expanded by adding an assessment of regional economic benefits. Thesebenefits are measured in terms of changes in business costs, both in absolute terms, and in relation to costs experienced by areas or regions not affected by the proposed improvement. Changes in businesscosts increase the productivity of affected businesses, allowing them to expand markets and market share, increase profits, or otherwise enhance their competitive position. Regional economic benefits include opportunities for business expansion, business attraction, and tourism development. Business expansion benefits include the indirect and induced effects of user benefits (travel time savings, operating cost changes, and safety benefits). Business attraction benefits include the effects of the highway investment on the types and quantity of new economic activity that may occur in the affected region as a result of the highway. This assessment typically includes the development of several scenarios, on the basis of varying levels of effort and initiative by local economic developers. Tourism benefits include changes in expenditures resulting from new tourist travel patterns. Three case studies are presented, illustrating the application of the framework to inter- and intraurban highway projects in wisconsin, massachusetts, and indiana. The case studies suggest that theframework captures regional benefits the value of which is equal to50 to 150% of user benefits alone. Regional benefits are sensitive to the level of improvement of the affected links, and to the implementation of related public policies. This paper appears in transportation research record no. 1274, Transportation and economic development 1990: proceedings of a conference, williamsburg, virginia, november 5-8, 1989.