Quantitative Approaches for Project Prioritization

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<ul><li><p>108</p><p>Transportation Research Record: Journal of the Transportation Research Board, No. 2303, Transportation Research Board of the National Academies, Washington, D.C., 2012, pp. 108116.DOI: 10.3141/2303-12</p><p>M. L. Outwater, T. Adler, and J. Dumont, Resource Systems Group, 55 Rail-road Row, White River Junction, VT 05001. M. Kitchen and A. Bassok, Puget Sound Regional Council, 1011 Western Avenue, Suite 500, Seattle, WA 98104. Corresponding author: M. L. Outwater, moutwater@rsginc.com.</p><p>PSRCs General Assembly adopted Transportation 2040 on May 20, 2010. Transportation 2040 is an action plan for transpor-tation in the central Puget Sound region for the next 30 years. Dur-ing that time, the region is expected to grow by roughly 1.5 million people and support more than 1.2 million new jobs. All of these new people and jobs are expected to boost demand for travel within and through the region by about 40%.</p><p>Evaluation CritEria</p><p>The development of Transportation 2040 involved a formal analysis of a range of plan alternatives. This analysis of alternatives inte-grated quantitative analysis (land use and travel modeling) with qualitative assessment (policy analysis). VISION 2040, the regions growth strategy, was the organizing framework for the evaluation; its goals, objectives, and policies guided the development of formal evaluation measures. These measures fell under the following seven categories of criteria:</p><p> Mobility, Finance, Growth management (the objectives of the regional growth </p><p>strategy), Economic prosperity (the objectives of the regional economic </p><p>strategy), Environmental stewardship, Quality of life, and Equity.</p><p>Early in the development of the evaluation criteria, numerous technical and policy committees in the region were identified as instrumental in providing feedback on the sufficiency of the criteria and the approach. A key message from many of the groups was that quantitative measures are not sufficient and that it is necessary to provide qualitative measures to address areas of policy interest ade-quately. The evaluation criteria were seen as a way to measure prog-ress toward achieving VISION 2040 and were developed to address the overarching goals of the transportation planning process. Indi-vidual metrics were developed to quantify different aspects of each evaluation criterion.</p><p>Many of the criterion measures were estimated in monetary values so that they could be included in a benefitcost analysis (BCA). Other criterion measures were reported with measures indicating direction and scale of change. The advantages of the BCA approach are that both benefits and costs can be combined to assess the potential economic </p><p>Quantitative Approaches for Project PrioritizationCase Study in Puget Sound, Washington</p><p>Maren L. Outwater, Thomas Adler, Jeffrey Dumont, Matthew Kitchen, and Alon Bassok</p><p>Transportation projects in major metropolitan regions can vary widely in the types of benefits that they provide and in the scales of those benefits. Travel forecasting models and related procedures can provide reason-able estimates of those benefits, and many benefits can be distilled into equivalent monetary benefits by the use of consumer surplus or other valuation approaches. In theory, those methods could also be used to pri-oritize projects for funding consideration. However, an approach that simply chooses projects that provide the greatest net economic benefits may not result in a mix of projects that most effectively accomplishes broad regional goals. This paper describes an approach to project pri-oritization that was developed to support stakeholder-based weighting of multiple goals and, for each goal, multiple measures. The approach uses the analytic hierarchy approach to develop weights for each goal and a conjoint-based method to estimate stakeholder weights for each measure. The approach was applied as part of Washington States Puget Sound Regional Councils Transportation 2040 process and achieved the goals in VISION 2040, the long-range land use plan. Weighting exercises were conducted with two stakeholder groups, and the results were applied to a set of proposed ferry, rail, highway, and local road projects. This paper describes the details of this case study and provides observations and conclusions from the work. The principal findings of the experiments were that statistically robust modeling conducted in real time during planning committee meetings can improve the transparency, equity, and collaboration of the project prioritization process.</p><p>The Puget Sound Regional Council (PSRC) is the principal forum for regional decision making in the central Puget Sound region of Washington State. PSRC works with local governments, busi-nesses, and citizens to build a common vision for the regions future, expressed through three connected major activities: VISION 2040, the regions growth strategy; Transportation 2040, the regions long-range transportation plan; and Prosperity Partnership, which develops and advances the regions economic strategy. PSRC has the momentum of its stakeholders (through public input, technical advisory commit-tees, and policy boards) to move toward greater regional sustainability with the implementation of the Transportation 2040 Plan.</p></li><li><p>Outwater, Adler, Dumont, Kitchen, and Bassok 109</p><p>consequences of a particular transportation alternative. The disadvan-tage is that nonmonetizable measures, such as growth management or economic prosperity, cannot be directly integrated. The full set of evaluation criteria recognizes the advantages of the BCA method but combines this method with other quantitative and qualitative measures to provide a more comprehensive assessment of each alternative.</p><p>BalanCing MultiPlE PrioritiES</p><p>PSRC has now expanded on this approach by developing a formal process through which criteria measured on independent scales can be integrated more completely. This is a standard multiple-criterion problem with a range of possible remedies, all of which involve the development of some kind of policy weights with recognition of the need to balance multiple priorities.</p><p>After adoption of the plan, a process for prioritizing projects included in the plan was developed to ensure support for implementa-tion of VISION 2040. As prescribed by PSRCs executive board, any process that is developed to assign priorities to actions and invest-ments must be done in an open, balanced, collaborative, and equitable manner.</p><p>As the region implements Transportation 2040, PSRC is com-mitted to developing and applying new administrative procedures based on adopted regional policy to</p><p> Admit future actions, projects, and investments into the plan and determine their status upon admission;</p><p> Remove existing actions and investments from the plan, if appropriate;</p><p> Change the status of actions and investments within the plan; and Assign priorities to actions and investments.</p><p>The procedures developed should use a common evaluation frame-work whenever possible and should explicitly assess key VISION 2040 policy areas, including</p><p> Supporting the regional growth strategy, with focus of growth in regionally designated centers inside the urban growth area;</p><p> Reducing greenhouse gases; Reducing vehicle miles traveled; Addressing freight mobility; Providing sustainable funding; Supporting equity and environmental justice; Reducing impacts on Puget Sound water quality; Addressing congestion and mobility; Promoting economic activity and employment growth; and Achieving a jobshousing balance.</p><p>The evaluation framework will be applied to long-range transpor-tation planning and may also influence future evaluation of projects for federal transportation improvement program funds, monitoring of the Transportation 2040 plan, and monitoring of the transportation system.</p><p>BaCkground</p><p>regional vision</p><p>The Transportation 2040 plan (1) and the transportation projects within it do not operate in isolation but rather are guided by the regions long-range land use plan VISION 2040. VISION 2040 is </p><p>the regional strategy for accommodating population and employ-ment growth by 2040 (2). The concept of people, prosperity, and planet is a central component in the strategy addressing sustainabil-ity and requiring consideration of a triple bottom line that addresses economic, environmental, and equity issues.</p><p>The regional growth strategy contained within VISION 2040 explicitly allocates population and employment by six regional geog-raphies (metropolitan, core, large and small cities, unincorporated urban areas, and rural areas). Each regional geography is intended to serve a unique role in the region to protect natural and resource lands, to improve air and water quality, to reduce congestion, and to ensure the efficient provision of services. To that end, the growth strategy includes 27 designated regional growth centers to concentrate popu-lation and employment further as well as to protect strategic industrial areas. The regional growth strategy is complemented by an environ-mental framework, six policy sections, and implementation actions to promote the well-being of people and communities, economic vitality, and a healthy environment.</p><p>travel Model and Economic valuation approach</p><p>The starting point for any analysis of transportation investments must involve a systematic means of estimating the projects effects on travel demand. The PSRC BCA tool (3) was designed to make use of comprehensive data banks produced by the PSRC regional travel demand forecasting models. A project is characterized in the transportation networks of travel models for one or more analysis years, and the models are run for both a build case (a network in which the project has been implemented) and a base case (a net-work in which the project has not been implemented). The PSRC BCA tool generates estimates of user benefits (travel time savings, travel reliability benefits, vehicle operating cost savings, accident risk reduction benefits, and vehicle emissions reduction savings) directly from mathematical transformations (consumer surplus calculations) of the differences between the build and base cases.</p><p>PSRC has developed a set of procedures and methods for proj-ect and program evaluation that generally falls into the category of transportation BCA. The purpose of these methods is to be able to produce information about project or program performance relative to the performance of a baseline set of conditions under which the project or program has not been implemented. BCA methods pro-duce information about the relative magnitude of benefits and costs that accrue (over time) to society as a result of any given action.</p><p>An important element in project and program evaluation is the identification of two alternate states of the world: one state of the world in which the project, program, or policy has been implemented and one state of the world in which the project, program, or policy has not been implemented. In all other respects, these states of the world resemble each other. The objective is to isolate the consequences of the investments or change in policy. In this respect, a natural affinity exists between prospective BCA and models of system change, such as those used for transportation planning. In a model framework, it is possible to represent a change in policy or investment selectively while everything else is held constant.</p><p>The basic steps in the BCA analysis process are as follows (3):</p><p>1. Define the project alternative and the base case.2. Determine the level of detail required.3. Develop basic user cost factors (values of time, vehicle unit </p><p>operating costs, accident rate and cost parameters, vehicle emissions rate and cost parameters, etc.).</p></li><li><p>110 Transportation Research Record 2303</p><p>4. Select economic factors (discount rate, analysis period, evalu-ation date, inflation rates, etc.).</p><p>5. Obtain traffic performance data (for the project alternative and base case) for explicitly modeled periods.</p><p>6. Measure user costs (for the project alternative and base case) for affected link(s) or corridor(s).</p><p>7. Calculate user benefits.8. Extrapolate or interpolate benefits to all project years (unless </p><p>all time periods are explicitly modeled).9. Determine present value of benefits and costs.</p><p>Transportation investments provide benefits directly to users in the form of travel time savings and reductions in other costs of travel. When the perceived costs of a trip are reduced, consumer surplus increases. As travel times are reduced between any origin and destination, users already making this trip enjoy lower costs, whereas new users (for whom the willingness to pay was less with the old cost of the trip) now take advantage of a travel opportunity that was not previously attractive to them. This situation leads to a simple approach to calculating the benefits of the improvement: subtract the consumer surplus without the improvement from the consumer surplus with the improvement. To do so, only two things need to be known: (a) the willingness-to-pay (demand) relationship that is involved and (b) the effect of the improvement on a users perception of his or her cost of travel.</p><p>To implement this procedure, much does not need to be known about the willingness-to-pay relationship. All that needs to be known is the effect on additional travel of a change in travel costs. Furthermore, the basic user benefit calculation can be made more detailed to recognize the major sources of user benefits: the savings in travel time, operating cost, reliability, and accident costs and the consumer surplus that such savings generate (4). This user benefit calculation is Formula 2-5 from the AASHTO user benefits manual (4). Unreimbursed accident costs are included here because they are user costs; reimbursed costs are paid for by a third party so are not included as user costs.</p><p>B UV V</p><p>L H</p><p>chst chstchst chst</p><p>chst</p><p>=</p><p>+</p><p>= +</p><p>, ,0 1</p><p>2</p><p> OC ACchst chstchst chst</p><p>s</p><p>V VL+( ) +</p><p>, ,0 12</p><p>where</p><p> Bchst = user benefit to vehicle or use class c at travel hour h on link s in project year t;</p><p> U = changes in user cost per vehicle mile traveled; H = H0 H1, which is equal to the change in value of travel </p><p>time per vehicle mile traveled (or per user) (without the improvement minus with the improvement);</p><p>OC = OC0 OC1, which is equal to the change in operating costs per vehicle mile traveled (or per user) (without the improvement minus with the improvement);</p><p>AC = AC0 AC1, which is equal to the change in un-reimbursed accident costs per vehicle mile traveled (or per user) (without the improvement minus with the improvement);</p><p> V0 = number of vehicles (or users) of class c in hour h without the improvement;</p><p> V1 = number of vehicles (or users) of class c in hour h with the improvement; and</p><p> L = segment or corridor length (in miles).</p><p>The user benefit calculation also incorporates induced traffic demand by incorporating traffic volumes with and without the project. This induced demand includes changes in trip making derived fro...</p></li></ul>

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