Economic Impact Performance Metrics: TYPES OF ECONOMIC METRICS

Economic Impact Performance Metrics_ TYPES OF ECONOMIC METRICS Studies

Project Background

The Strategic Highway Research Program II (SHRP2), Capacity Project C03 was entitled: Interactions between Transportation Capacity, Economic Systems, and Land Use. This project produced a series of reports on methods, models and case studies that examined the economic and development impacts of highway capacity investments projects. This report is one volume in that series.

The intent of this project and its research products and web tool is to further public and transportation agency understanding of the range of economic impacts that occur from various types of highway projects. This information can aid both technical research and public discussion of the topic. It can also help define the broad range of impacts and factors affecting them, to assist transportation agencies in their planning processes. And it can help refine public debate about highway projects by establishing boundaries of the likely positive and negative impacts that typically occur from such projects.

This Report is designed to complement other products of this project, by providing metrics commonly used for measuring the economic benefits and impacts of transportation projects. Consistent with objectives of the Strategic Highway Research Program, it focuses on metrics relevant to highway projects, although most of these factors also relate to other transportation modes.

Differentiating Types of Benefits and Impacts

Transportation investments can have significant benefits and impacts that are often considered in analyses of potential capacity expansion projects. They can be grouped into two major categories:

  • Economic Value of User Benefits – These impacts include the money value of user benefits such as travel time savings, fuel and non-fuel cost savings, improvements in reliability, and safety benefits. User benefits can lead to broader economic development impacts, though they do not necessarily represent all of the locational access, connectivity and productivity factors that create economic development impacts. While the SHRP C03 project focused on economic development impacts rather than user benefits, it is important to lay out the metrics for both so that their differences can be appreciated.
  • Economic Development Impacts – This encompasses long-term macroeconomic impacts such as changes in employment, income, business output and associated changes in land values and land development. These factors typically reflect changes in productivity resulting from improvements in market accessibility, intermodal connectivity, scheduling, logistics and international competitiveness. They can also reflect short-term construction spending and dislocation effects. The SHRP C03 project focused exclusively on this category of impacts.

Objective and Organization of this Document

Report Content and Use

The remainder of this document lays out alternative measures of the economic value of transportation project benefits to users (chapter 2) and the level of impact a transportation project can have on a surrounding area economy (chapter 3). This information, particularly the metrics discussed in Chapter 3, draws heavily from findings of the case study data collection efforts of SHRP Project C03, from which lessons were learned concerning the challenges of measuring various elements of economic impact. However, the information was also designed to expand material for SHRP Project C02, which has developed a Transportation Performance Measures web site.

Presentation Organization

For each of the two main categories of economic metric (user benefit and economic development impact), there is a general discussion of the purpose and use of that category and then a presentation of alternative measures available. In general, these various measures are overlapping in their responsiveness to transportation enhancement, but also different in their coverage of effects.

For each individual metric (measures), the following information is provided:

  1. Name/class of measure
  2. Data requirements for calculation
  3. Applicable geographic scale
  4. Ability to be forecasted
  5. Case studies (transportation projects where it was used)
  6. Examples of use (measurements develop ed)
  7. How to use this measure in transportation planning
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