Benefit-Cost Analysis for SANDAG 2050 Regional Transportation Plan

Benefit-Cost Analysis for SANDAG 2050 Regional Transportation Plan | San Diego
Benefit-Cost Analysis for SANDAG 2050 Regional Transportation Plan | San Diego, CA, US
San Diego Association of Governments
San Diego, California, USA

The San Diego Association of Governments (SANDAG) retained HDR to insert the economic dimension into the scenarios evaluation as part of the regional transportation planning process. HDR's task was to evaluate different transportation scenarios presented to the board and assist SANDAG in selecting the most economically efficient scenario (i.e., the one maximizing the net benefits to society). A cost benefit analysis framework was developed to quantify in monetary terms the lifecycle costs and benefits of the different scenarios. The framework recognizes three broad benefit categories:

  • User benefits—benefits to existing and new users of the transportation system such as travel time savings and out-of-pocket travel cost savings
  • External benefits—changes in emission levels, as well as changes in the number and severity of motor vehicle crashes
  • Community livability benefits—existence and option value of the proposed transportation investment, along with livability improvements brought about by the investment (e.g., more destinations within a walking distance)

These benefits were estimated through 2080, discounted to their present value and compared to the capital costs and operating and maintenance costs for each scenario. To account for the uncertainty surrounding key model parameters (such as the discount rate) and to test the robustness of the model results (net present value, benefit/cost ratio and internal rate of return), the benefit-cost analysis was supplemented by a sensitivity analysis.