STONE-THESIS-2014

Copyright
by
Cody Dillon Stone
2014

The Thesis Committee for Cody Dillon Stone
Certifies that this is the approved version of the following thesis:
A Methodological Framework for Economic Evaluation of Existing
Roadway Assets
APPROVED BY
SUPERVISING COMMITTEE:
Zhanmin Zhang
Randy Machemehl
Supervisor:

Roadway Assets
by
Cody Dillon Stone, B.S.C.E.
Thesis
Presented to the Faculty of the Graduate School of
The University of Texas at Austin
in Partial Fulfillment
of the Requirements
for the Degree of
Master of Science in Engineering
The University of Texas at Austin
May 2014

iv
Acknowledgements
I would sincerely like to thank my academic supervisor, Dr. Zhanmin Zhang, for
his constant support, guidance, and encouragement throughout the course of this study
and my time at The University of Texas at Austin. I would also like to thank the entire
faculty and staff in the Transportation group at The University of Texas at Austin for
everything that they have done for me. In addition, I would like to specially thank Dr.
Randy Machemehl for providing valuable feedback as a second reader for this thesis.

v
Abstract
Roadway Assets
Cody Dillon Stone, M.S.E.
The University of Texas at Austin, 2014
Supervisor: Zhanmin Zhang
Asset management is an integral part of maintaining and preserving the
transportation infrastructure. In order to better manage the roadway assets, a value based
on their economic contribution should be assigned. The actual monetary contribution a
roadway makes to the overall economy can be difficult to quantify. Because of this
difficulty, most agencies use asset valuation techniques that are based on construction
and material costs, rather than utilization. This proposed study aims to establish a
framework to quantify the economic value of existing roadways. Traditionally in
transportation asset management, economic evaluation research has been mostly
qualitative in nature and insufficient in generating a numerical value. Although there are
many techniques to project the economic impact of a future roadway, there has not been
much work done on evaluating the economic value of existing roadway infrastructure. In
this thesis, some of the tools used in economic impact studies are adopted as a means to
evaluate the value of existing roadways, leading to the development of comprehensive
methodological framework as a guide to perform economic evaluation on existing
roadways.

vi
Table of Contents
List of Tables ....................................................................................................... viii
List of Figures........................................................................................................ ix
1. INTRODUCTION...............................................................................................1
1.1 Motivation for Research ........................................................................2
1.2 Significance of Research........................................................................2
1.3 Thesis Organization ...............................................................................2
2. BACKGROUND.................................................................................................4
2.1 Traditional Asset Valuation Techniques................................................4
2.1.1 Previous Studies............................................................................6
Appalachian Development Highways...........................................6
Network Corridor and Economic Impact Studies.........................7
2.2 Economic Evaluation.............................................................................8
2.2.1 Direct Economic Impacts..............................................................8
2.2.2 Indirect Economic Impacts ...........................................................8
2.3 Economic Development.......................................................................10
2.4 Factors for Economic Impact...............................................................12
2.4.1 Direct Economic Impact Factors ................................................12
2.4.2 Indirect Economic Impact Factors..............................................14
3. METHODOLOGICAL FRAMEWORK...............................................................19
3.1 Application of Methodological Framework.........................................21
4. PROBLEM SOLUTION ....................................................................................23
4.1 Time Savings .......................................................................................25
4.2 Truck Commodity Flow.......................................................................27
4.3 Added Employment .............................................................................29
4.4 Roadside Businesses ............................................................................30
4.5 Overall Formulation.............................................................................31

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5. CASE STUDY .................................................................................................33
5.1 Theoretical Example............................................................................33
5.2 Time Savings Value.............................................................................35
5.3 Truck Commodity Flow Value ............................................................38
5.4 Added Employment Value...................................................................40
5.5 Roadside Business Value.....................................................................41
5.6 Overall Economic Value......................................................................42
6. CONCLUSIONS, RECOMMENDATIONS, AND FUTURE WORK .......................46
6.1 Conclusions..........................................................................................46
6.2 Recommendations................................................................................48
6.3 Future Work.........................................................................................49
APPENDIX...............................................................................................................51
BIBLIOGRAPHY................................................................................................57

viii
List of Tables
Table 1: Case Study Roadways...........................................................................34
Table 2: Time Savings by Roadway. ..................................................................36
Table 3: Commodity Values for Case Study. ....................................................38
Table 4: Coefficient Values for Indirect Economic Impact Factors. ..............43
Table 5: VOT, VOC, and EC for Case Study....................................................51
Table 6: Mopac Truck Commodity Value.........................................................51
Table 7: Cesar Chavez Truck Commodity Value.............................................52
Table 8: MLK Truck Commodity Value...........................................................53
Table 9: I-35 Truck Commodity Value..............................................................54
Table 10: South Lamar Truck Commodity Value............................................55
Table 11: Employment and Vehicle Miles Traveled for Case Study. .............55
Table 12: Roadside Business Revenue. ..............................................................56
Table 13: Roadside Businesses for Roadways in Case Study. .........................56

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List of Figures
Figure 1: Economic Development of Roadways (Litman 2013). .....................10
Figure 2: Connectivity of Austin Area...............................................................15
Figure 3: Methodological Framework for Economic Evaluation....................20
Figure 4: Map of Case Study Roadways............................................................34
Figure 5: Time Savings Value by Mode.............................................................37
Figure 6: Total Time Savings Value...................................................................37
Figure 7: Total Truck Commodity Value..........................................................39
Figure 8: Total Added Employment Value. ......................................................40
Figure 9: Total Roadside Business Value. .........................................................41
Figure 10: Weight of Economic Impact Factors ...............................................42
Figure 11: Overall Economic Value. ..................................................................44
Figure 12: Economic Value Compared to AADT. ............................................45

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1. INTRODUCTION
America’s economy hinges on the overall efficiency of the roadway network.
Everything we do revolves around having the mobility to perform our daily activities and
transport various goods. America’s roadway network influences businesses, education,
health-care, jobs, recreation, and government services by providing the links to perform
the necessary functions. The return of investments in roadway infrastructure is difficult
to quantify, but generally accepted to be vital to the nation’s economic success. U.S.
businesses and individuals earn over $788 billion in direct economic benefits from
roadways and public transportation (Shapiro 2003). About $474 billion of this total
amount is simply from time savings to and from work. The rest is through lower costs
and increased productivity based on roadway efficiency (Shapiro 2003). In comparison,
the cost of taking care of these roadways is only $185 billion, creating a benefit to cost
ratio of over 4 to 1 by direct benefits alone. It is clear that roadway infrastructure has a
tangible benefit on a macro scale, but what about on a smaller scale? How much is a
single roadway worth?
It is difficult to assess and quantify the economic benefit of existing roadways,
especially when it comes to the impact on the economy of a localized area. Roadways
have a variety of different types of impact, whether it be connecting commuters to their
business, allowing freight to travel with the highest mobility, or connecting major cities
and allowing services that provide “just in time” delivery. In this thesis, a framework
will be put in place to assess such economic values using available traffic and economic
data. This framework can be used as a basis of comparison for asset management.

2
1.1 MOTIVATION FOR RESEARCH
Economic prosperity relies heavily on the efficiency of adequate transportation
infrastructure, which facilitates the movement of people and goods. Millions of tons of
goods are transported each year. In addition, millions of Americans commute to and
from work each day by car. Roadways have an astounding impact on our daily lives and
ability to function. It is generally known that the more a roadway is used, the higher the
impact it has on the overall economy. Despite a general consensus on this principle, most
asset valuation techniques fail to capture the value generated by the utilization of the
roadway. A more comprehensive economic evaluation technique to measure economic
impact is needed to capture the value of roadway utilization.
1.2 SIGNIFICANCE OF RESEARCH
The research developed in preparation of this thesis represents a synthesizing of
economic impact analysis and asset valuation techniques. There are a variety of methods
used to describe and quantify the economic impact of roadways being built. The factors
used to represent the economic impact of future roadways were applied to capture the
economic impact of existing roadways. This includes using data available to most state
DOTs to convey the utilization of roadways and the economic value of that utilization. A
methodological framework was established that allows agencies to quantify the economic
value of existing roadways according to their own set of strategic goals. The framework
is flexible to provide easy adaption on large networks and based on local conditions.
1.3 THESIS ORGANIZATION
The remainder of this thesis is organized into 5 chapters. Chapter 2 includes the
background information regarding the concept of economic evaluation, asset valuation,
economic development, and economic impact. Chapter 3 lays out a methodological

3
framework for economic evaluation of existing roadways. This chapter includes the
factors needed for evaluation and sets the guidelines in applying the framework. The
methodology includes the economic impact factors used to represent both direct and
indirect economic impact, the significance in comparing individual economic factors, and
a guide to applying appropriate weights to each factor.
Chapter 4 addresses the formulation used to capture each economic impact of
existing roadways. The formulas were developed to best capture the value in utilization
and production. Next, Chapter 5 represents a case study that applies the methodological
framework to a theoretical case study. The case study represents a common asset
management dilemma, which is the question of which roadway should receive preventive
maintenance on a limited budget based on economic value. After the case study is
analyzed, conclusions, implementation strategies, and recommendations for future work
are discussed in Chapter 6.

4
2. BACKGROUND
Economic evaluation of roadways is an essential component in the process of
efficiently managing roadway assets. It allows highway agencies to perform maintenance
and rehabilitation in the most efficient and least invasive ways possible. The difficulty
lies in conducting a quantitative estimate of the roadways value. As a result of this
difficulty in quantifying the economic value of an existing roadway, a variety of asset
valuation techniques have been applied to roadway networks.
2.1 TRADITIONAL ASSET VALUATION TECHNIQUES
There are many different types of valuation methods used for asset management.
Economic evaluation is often mentioned in literature, but rarely ever applied in practice
because of its difficulty to implement. Some of the valuation techniques applied to
roadway networks include (Saarinan 2007):
Book Value – This is the value of an asset used in most accounting systems. It is
usually the original acquisition cost of a roadway adjusted to the present day
value. This includes material and labor cost and is adjusted for depreciation.
Book value is the most common valuation technique used for asset management
of transportation assets.

5
Replacement Cost – The cost it would take to a roadway with its condition being
identical to the one under evaluation, based on present day labor and material
costs. This would be recreating the asset in its exact current condition.
Market Value – The market value is the direct price a buyer is willing to pay. It
doesn’t apply to roadways very often because most roadways are publicly owned
and operated.
Equivalent Present Value – The equivalent present value represents the value
“as is”. It is based on historic costs adjusted for inflation, depreciation, depletion,
and wear. (Zhang, 2013)
Utility Value – The utility value represents the quantitative and qualitative
benefit of a roadway asset to the user. It is the value derived from usage of a
roadway.
The economic value is very similar to the utility value. It is a way to measure the
benefit of a roadway to the user, while also conveying the benefit to society as a whole.
The benefit to users can be categorized as direct or indirect. The direct benefits include
factors that roadway users can perceive while utilizing a roadway, such as time savings or
comfort. The indirect benefits to users are benefits to the overall system that will benefit
both the individual and the economy, but cannot be directly felt by the user.
It is important to understand that asset valuation is a subset of economic
evaluation. Asset valuation techniques have been used as a means to compare roadway
value, but fail to recognize the monetary economic gains attributed to utilization. Asset

6
valuation often mimics the actual material and construction cost rather than the value
added by the roadway asset.
2.1.1 Previous Studies
Though there have been many network corridor and economic impact studies for
future roadways, research on economic evaluation of existing roadways has been almost
nonexistent. One study, as briefly discussed in the following section, did look at
economic evaluation of existing highways in the Appalachian region (Wilbur 1998).
Appalachian Development Highways
The Appalachian Development Highways Economic Impact Study was performed
in 1998 to measure the economic success of a large highway project and determine if the
project should be seen to completion (Wilbur 1998). The Appalachian Development
Highway System (ADHS) was begun in 1965 and about 75 percent complete at the time
of the study. The local tax payers had spent over $4 billion on the project, and the study
was issued to determine the economic value that could be attributed to the completed
portions of the project. A decision on whether the project should be completed would be
based on the economic impact of the built highways. To perform this evaluation, several
economic factors were considered and a regional economic model was applied to the
highways in an unorthodox fashion. Traditionally, economic models are used to predict
future economic impacts, but, for the purposes of the study, the model was significantly
adjusted to measure the existing economic value of the highways. The study successfully
estimated the value of existing highways and lead to the completion of the ADHS.

7
Network Corridor and Economic Impact Studies
Despite very few studies being conducted on the economic value of existing
roadways, there have been a variety of network corridor studies. Bruinsma, Reinstra, and
Reitvald studied the economic impact of construction of the A1 highway corridor in the
Netherlands (Bruinsma 1997). Boarnet and Chalermpong examined the link between
highways and urban development in their study of new highways in California (Boarnet
2001). Forkenbrock and Foster looked at the economic benefits of highway investment
(Forkenbrock 1990). Gaegler looked at the economic effects of the Connecticut Turnpike
(Gaegler 1975).
The economic impact evaluation of new projects has been common and spanned
over many decades. Adler (Adler 1971) provided a comprehensive manual of case
studies dealing with economic appraisal of transport projects back in 1971. Iacono and
Levinson (Iacono 2009) looked at the economic impact of upgrading roads in terms of
property values. They found for most construction or reconstruction projects, property
values were unaffected.
There have been varying perspectives on the relationship between transport and
regional development. Voigt found that transport is a crucial factor in economic
development and has many positive indirect impacts on the regional economy (Voigt
1973). However, Banister and Berechman came to the conclusion that transport
investment does not always lead to economic development, it is dependent on specific
regional variables (Banister 1999). The competing viewpoints both acknowledge the
importance of regional evaluation and that transport can often play an important role in
economic development.
There are many network corridor studies and economic impact studies that
provide economic relationships that are important when evaluating roadway assets.

8
However, most studies have dealt with new construction and investment analysis, rather
than roadway assets that have already been built.
2.2 ECONOMIC EVALUATION
Economic value includes any value contributed by a roadway and added to the
economy. Such values include the direct impact the road has on users’ mobility and
vehicle operating costs, and indirect impact through the movement of goods, provision of
services, and labor.
2.2.1 Direct Economic Impacts
Direct economic impacts from roadways traditionally relate to mobility and
accessibility. They are the most direct means in which economic impact can be
measured. As such, they provide the easiest method of quantifying economic value.
There have been many network corridor studies that use mostly direct economic
evaluation methods. Most economic evaluations involve quantifying the time and costs
saved by a particular roadway. Other costs that are used less often include accident cost,
environmental cost, and vehicle operation cost. The time cost can relate to the delay and
congestion of a roadway, or simply how much time a particular roadway saves in total
system travel time for a network.
2.2.2 Indirect Economic Impacts
Indirect economic impacts are generally economic value added that is not directly
seen by the user. For economic evaluation of roadways, indirect economic impact can

9
include the employment added, price of goods and services, tourism, and roadside service
businesses (Rodrigue 2013). These factors have an effect on the economic contribution
of roadways, but the dollar amount is often difficult to determine. Certain roadways, like
interstate highways, are commonly thought to have a much larger economic impact than
connector roadways. This is because interstates often have much larger daily passenger
vehicle and truck usage.
Many traditional economic evaluation methods fail to address these indirect
economic impacts. This can be an egregious error because the transportation costs
relating to the direct economic impacts tend to be relatively low compared to the indirect
impact on economic processes. Some of the major impacts of transport on these
economic processes include (Rodrigue 2013):
 Geographic specialization – Geographic specialization refers to the geographic
concentrations of industry. Certain roadways favor the process of geographical
specialization, which increases productivity and interaction. An example of this
is how businesses tend to agglomerate in one area. This increases the economic
value of the vital roadways in the geographic area.
 Large scale production – Roadway networks and corridors can provide certain
connectivity to larger markets that promote mass production. Roadways that
connect large market areas, like cities, facilitate production. Thus roadways, like
large highways, that connect different markets provide a greater economic impact
relating to productivity and distribution.
 Increased competition – As the transportation network becomes more efficient, a
larger array of goods and services become available to consumers. This tends to
reduce costs and create competition among businesses (Rodrigue 2013).

10
 Increased land value – Businesses, especially roadside services, adjacent to
roadways tend to have a greater economic value due to the traffic carried by the
roadway. For residential areas, the opposite may be true in the case of highways
or busy streets.
2.3 ECONOMIC DEVELOPMENT
Economic development refers to increased productivity, employment, income,
property values, and tax revenues (Ellis 2013). Economic development relates to many
of the indirect economic impacts. In transportation, this economic development can be
captured for the evaluation of a roadway in its contribution to productivity, increased
competition, and increased labor markets. The following diagram illustrates some of the
factors of economic development:
Figure 1: Economic Development of Roadways (Litman 2013).

11
Most economic development factors are a consequence of direct economic
impacts. For example, the direct economic impact of travel time savings occurs along a
major highway, while the economic development that occurs from that travel time
savings can be seen in increased business productivity as commuters can reach their
destination on time. Many of these factors are interdependent of one another. When
there is an increase in employment for a region, there is typically also an increase in
business competition. Some of the economic development factors include:
Roadside businesses – This comprises all businesses that sell goods and services
along a roadway. They cater to the traffic and include gasoline stations,
hotels/motels, restaurants, shops, and other businesses. As traffic increases, so do
the number of roadside service establishments (Wilbur 1998).
Goods and services – In addition to businesses being located along a roadway,
roadways can provide a means for goods and services to travel quickly and
efficiently. The value added in this category can be attributed to truck commodity
value and increased competition between businesses. There is also the concept of
“on time delivery” in which some businesses base their profitability on being able
to utilize the roadway network efficiently. Package delivery businesses, such as
FedEx and UPS, require the use of roadways in order to profit based on timely
deliveries and overall efficiency.
Jobs and competition – Roadways can provide a means for economic
development in the region and result in an increase in employment (Whitelegg

12
1994). The amount of employment along a roadway can reflect its value added to
the economy. Roadways can also provide a means to increased competition. As a
network becomes more connected, businesses must deal with the users having
access to other competitors, creating a more competitive business environment.
The economic value of an asset can be evaluated by capturing these factors
quantitatively. A framework can be developed by including certain quantifiable aspects
of a roadway that exemplify these factors.
2.4 FACTORS FOR ECONOMIC IMPACT
Defining the factors used to represent economic impact is essential for creating an
accurate economic evaluation framework. The factors used must capture both direct and
indirect impacts. They also must adequately measure the value generated from utilization
of the roadway, movement of goods and services, and added employment.
2.4.1 Direct Economic Impact Factors
The most direct way to quantify the economic value of an existing roadway is by
looking at its time savings on a network. In other words, if the roadway did not exist, the
additional time that would result on a network in terms of total system travel time.
Another technique that can be used to find time savings is computing trip detour times in
comparison to regular free flow times. Once the time savings attributed to a roadway is
found, it can be used to determine the value added through delay cost, vehicle operating
cost, and environmental cost.

13
Delay cost for a roadway is simply the time savings associated with a roadway
multiplied by the value of time. The value of time used for previous studies varies from
$10 to $30 per hour. Calfee and Winston studied this value of automobile travel time and
how it is adjusted by commuter time (Calfee 1998). This value of time fluctuates based
on location and time. For example, users of a roadway in a very low income area may
have a low value of time because the average income is close to minimum wage, i.e., $8
per hour, while users of a roadway in a high income area may value time at a much
higher level. In addition, the value of time is often higher during rush hour of weekdays
because users’ time spent in traffic directly affects their work pay and output. On
weekends, most users do not have the same time constraints, so the value of time is
lower.
The value of time can be separated into two main categories: the first category
being the value of time for passenger vehicles and the second being the value of time for
truck vehicles. It is generally accepted that the value of time for truck vehicles is higher
than passenger vehicles because businesses rely on truck efficiency and on time delivery.
Delay has larger monetary value on businesses because of their movement of goods.
Vehicle operating cost is simply the added cost of running a vehicle over a time
increment. This cost is associated with fuel and vehicle maintenance. If the time savings
a roadway provides is high, users are seeing a direct economic return in the cost of
operating their vehicles.
The environmental cost is the cost of the added pollution to the environment
based on the time or distance traveled. Vehicles release numerous harmful emissions,
including carbon dioxide. As the time savings of a roadway increases, less harmful
emissions are released into the atmosphere which pollute the environment.

14
Some of the direct economic impact factors that are more difficult to quantify
include construction, maintenance and rehabilitation, and crash costs. Roadways vary in
the cost of construction based on when they were built, materials used, type of roadway,
and construction techniques. Roadway maintenance and rehabilitation have a broad
range based on agency strategic goals and types of pavement. Crash costs are often based
on weather conditions and skid resistance. It is difficult to calculate all of these factors as
they relate to the present condition of a roadway.
2.4.2 Indirect Economic Impact Factors
Quantifying the indirect economic value of existing roadways presents a much
more difficult challenge. As described in the economic development section, there are a
large number of factors that contribute to the economy. Many of these factors overlap as
well. For example, a roadway that sees an increase in trucks will not only have increased
utilization in terms of goods and commodities, but may serve larger scale production that
rely on timely delivery. If the value of goods and commodities are added in addition to
added labor, the true economic value may be overestimated.
An important concept to the economic value of a roadway is the overall
connectivity of the network. Networks with low connectivity may require users to utilize
a single roadway as the only option in reaching a destination, while highly connected
networks give users more options in making a route choice. An example of the
difference in connectivity is shown in Figure 2. The connectivity of roadways in Austin
varies greatly depending on location. The downtown area operates on a grid system,
while the surrounding areas often contain tree-like network patterns.

15
Figure 2: Connectivity of Austin Area.
There are a variety of factors that capture the indirect economic impact of a
roadway. These factors are often interdependent and fluctuate with one another. Though
the interdependency is very difficult to measure, it can allow some factors to reflect
others that are not quantifiable.
Connectivity – As described previously, the economic effects of the different
levels of connectivity are very significant. Low connectivity can create higher
utilization on major roadways due to the lack of alternative routes. This leads to
an increase in roadside services, which rely on accessibility and utilization. A
network with high connectivity, on the other hand, has more route choices which
lower the time savings associated with an individual roadway. However, high
connectivity networks encourage business agglomeration for particular industries

16
because of the higher accessibility and connectivity can often reflect areas with
higher employment. Connectivity is a very important concept to consider when
analyzing the varying factors that can quantify economic impacts.
Goods and Services – The flow of goods and services on roadways provide a
measure of the overall productivity and utility of a roadway. The movement and
value of goods and services can be quantified using truck flow for different
industries. Truck flow by industry changes by location, with more valuable
roadways for goods and services connecting major cities and carrying valuable
commodities.
Roadside Businesses – Roadside businesses are services that rely on the
utilization of a roadway for economic benefit. Gas stations are particular roadside
services that show the value of a roadway by number of stations and
agglomeration near important connectors. Other roadside services include hotels,
restaurants, and food marts. The value of these roadside businesses can be
quantified by assigning an economic value, based on service type, and
multiplying by the number of services along a particular roadway.
Added Employment – A roadway can provide a means to connect laborers to
their employment and even create employment in the case of drivers and
transportation-reliant industries. This factor is also related to the overall
utilization of the roadway. Highways usually have higher average annual daily
traffic (AADT), which reflects a higher number of commuters. Major businesses
that house a large number of employees often pick their location based on

17
accessibility from major highways and large networks. Efficient roadway
networks often encourage business agglomeration as well, creating a large
increase in jobs for the regional area.
Large Scale Production – The capability of connecting large metro centers and
airports gives roadways the added value of large-scale production. This includes
transport between major cities and interconnectivity of different transportation
assets to carry out mass production. For example, many industries rely on
roadways that provide an efficient connection to airports or seaports to transfer
goods for on time delivery. Roadways function as part of an overall
transportation system and allow business to capitalize on regional, national, or
global connectivity.
Tourism – The efficiency and effectiveness of a roadway network can also lead
to or contribute to the popularity of tourist areas. Roadways can provide
economic benefits to the tourism industry and “big” events. “Big” events include
any event that attracts visitors from outside regions, such as the Olympics. An
efficient transportation network cannot only enhance the economic returns of
tourist destinations, but also can attract large events that require an effective
transportation network.
A framework can be developed using some of these economic development
factors. The factors used in this framework are by no means an exhausted list of
economic contributions. In addition to the factors described, there are alos other factors
such as increased competition, fluctuating land value, and logistics. Each of these factors

18
also has an effect on the overall economic value of a roadway, but are much more
difficult to quantify on a large scale. For this thesis, some of these factors will be used to
capture the direct and indirect economic impacts of roadways.

19
3. METHODOLOGICAL FRAMEWORK
The methodological framework provides an overview of the major components
and the relationships among them for performing economic evaluation on existing
roadways, as shown in Figure 3. Economic value is split into two categories, direct
impact value and indirect impact value. The direct economic value represents user time
savings, while the indirect economic value is representative of the contribution a roadway
makes to economic development. Agencies can choose to look at these factors
individually, based on regional and project specific needs, or as a whole, as a means to
evaluate roadway asset value.

20
Figure 3: Methodological Framework for Economic Evaluation.

21
3.1 APPLICATION OF METHODOLOGICAL FRAMEWORK
The framework captures the economic impact of an existing roadway using travel
efficiency and economic development factors. Travel efficiency factors represent direct
economic impacts, while economic development factors represent the indirect economic
impacts.
The factors used for travel efficiency were delay cost, vehicle operating cost, and
environmental cost. Each of these factors conveys a direct value of road usage and can
be quantified by various agencies. The direct economic impacts of construction,
maintenance and rehabilitation, and crashes were not included chiefly because they
require large amounts of historical data and may be unavailable to many agencies. They
also do not reflect the direct utilization of a roadway, as they are a consequence of
physical condition.
The factors included for economic development were truck commodity value,
added employment value, and roadside business value. These factors portray the
movement of goods and services, added employment, and adjacent business from
utilization. Economic development factors that were not used in the framework include
accessibility/connectivity, large scale production, and tourism. These factors were too
difficult to quantify accurately, and will be explained in the problem solution. Despite
not being included directly in the framework, the factors interact and have
interdependency with the economic development factors that were included. For

22
instance, a roadway that has significant importance for large scale production often
shows an increase in truck commodity flow.
After the factors for economic impact have been defined, formulation for the
added value of each factor can be created. The formulation for each factor can be found
in the problem solution of this thesis.
The actual monetary value for each factor calculated from formulation can be
compared individually or as an overall economic value. If a particular economic impact
factor is essential for the local condition, the roadway values for that factor can be
compared directly and used for asset management. However, if an agency would like to
use a combination of each factor for an overall economic value, relative weights must be
applied to normalize the final values. Without relative weights for each factor, truck
commodity value would significantly outweigh the economic impact of all other factors.
The final step of the framework is comparison analysis, which represents the asset
management portion of the methodology. Decision makers can use the quantified
economic values to compare assets for maintenance and rehabilitation projects.
Depending on the goals and local conditions, decision makers can weigh the economic
factors and use both individual factor analysis and overall economic impact analysis.

23
4. PROBLEM SOLUTION
In order to find the economic value of roadways, a formulation must be created
that incorporates the variety of economic impacts. There has not been a common formula
used in previous studies. The formulation must capture both the direct and indirect
economic value of roadways.
One of the main difficulties in coming up with the formulation is deciding which
economic factors should be included. For this thesis, two basic criteria must be met in
order to be included in the formulation. First, the factors must have the ability to be
quantified in a timely manner using available data. Timely manner meaning that the data
must be simple to find and implement for different agencies so it can be applied to
roadway asset networks. Secondly, the factors must adequately capture the utility and
economic contributions of a roadway. The economic values will be based on overall
utility, businesses adjacent to the roadway, connection to employment, and movement of
commodities.
Using this criterion, the factors for economic evaluation used for this thesis are
time savings, truck commodity flow, roadside businesses, and added employment. The
time savings represents the direct economic impact of roadways, while truck commodity
flow, roadside businesses, and added employment represent the indirect contributions in
terms of economic development.
The economic development factors have some degree of interdependency with
each other in terms of economic contributions. For example, truck commodity flow
contributes to added employment and roadside businesses, roadside businesses positively

24
contribute to truck commodity flow and added employment, and added employment
positively contributes to truck commodity flow and roadside businesses. To
accommodate this overlap resulting from interdependencies in contributions, coefficients
were included for each factor that will range from 0 to 1. A coefficient of one would
represent a network that has little to no overlap for the specified factor and the two other
economic development factors. A coefficient of zero would represent a network where
there is complete overlap between the specified economic development factor. This
would mean the factor should not be included in the formulation. The amount of
interdependency will differ based on location and the agency using the framework;
therefore the coefficients are adjustable, based on the needs of the user.
The time savings formulation does not have a coefficient because that is the most
direct way to find the economic impact of a roadway. The time savings reflects the
utility and efficiency of a roadway.
Some factors briefly discussed in the background are not included in the problem
solution because they do not meet the criterion. Tourism is too difficult to quantify and
does not have many variables that can represent the data. It also varies greatly depending
on the area of study. Connectivity was not included as a factor because it has an impact
on many of the other factors. The higher the connectivity of a network, the more route
choices are available to the user. This results in lower time savings for a single roadway.
In addition, lower connectivity often results in many roadside businesses on the major
roadways in a network.

25
Another factor that effects the economic value of a roadway but was not included
is the large scale production contributions. Roadways often provide a connection to
airports or between large cities, which can greatly enhance an area’s economic output.
Despite this being a well-known factor of economic contribution, the amount of the
impact is very difficult to quantify. Many businesses rely on the roadways that connect
major cities and airports, but the benefit is usually seen in the overall prosperity of the
city or regional area. The difficulty in measuring large scale production impacts is in
distinguishing the roadways that enhance it and by how much.
4.1 TIME SAVINGS
Time savings measures the amount of time an average vehicle will save by using
one roadway over any other roadway. In other words, the time savings is equal to the
amount of time that would be added to one’s trip if that roadway segment did not exist.
The total impact that can be attributed from the time savings is found using three values;
value of time (VOT), vehicle operating cost (VOC), and environment cost (EC). The
time savings were split into two categories, passenger vehicles (pv) and trucks (t).
Trucks have a much more significant impact than passenger vehicles in all three value
characteristics. The formulation for the time savings direct economic impact used is as
follows:
Direct Economic Benefit = (Time Savingspv)*(VOTpv + VOCpv + ECpv)
+ (Time Savingst)*(VOTt + VOCt + ECt)

26
Value of time is the amount of monetary value placed on a specific amount of
time. The value of time varies among users, with people of varying socio-economics and
risk aversion having a wide range of value. The value of time also varies from one region
to another because of the income associated with the region and culture. For example, in
some regional areas and countries it is fine to arrive reasonably late to work. In this
instance, the value of time would decrease because businesses are more flexible with
users’ timeliness. Trucks have a much higher value of time than passenger vehicles
because of the concept of on-time delivery. There are often monetary repercussions for
trucks that arrive late with deliveries, which cause their value of time on the roadway to
increase. In addition, truck drivers are working while on the roadway, while passenger
vehicles are usually not working. Value of time is higher while working because it has a
direct effect on one’s income. The value of time of $12.50 was given for each passenger
vehicle and a value of time of $24.70 was given for each truck. These values are based
on the suggested values of time that are in use by the U.S. Department of Transportation
based on all-purpose travel (Belenky 2009).
Vehicle operating cost is the cost of operating a vehicle over a particular time
interval. Time savings results in savings in fuel and maintenance for a vehicle in addition
to the user’s value of time. The vehicle operating cost is higher for trucks than passenger
vehicles because they require more fuel and maintenance. Trucks also use significantly
more fuel while idling, which is often associated with congestion. For this report, a
vehicle operating cost of $0.205 per mile was attributed to each passenger vehicle and a

27
vehicle operating cost of $0.40 per mile was attributed to each truck (AAA) (Barnes
2003).
The environmental cost is the cost associated with the amount of harmful
emissions released into the atmosphere from vehicle exhaust. This cost is usually given
in dollars per ton, so it must be adjusted to dollars per minute in order to be applied to the
time savings formulation. Trucks use diesel fuel and have lower miles per gallon, so they
will have a slightly higher environmental cost than passenger vehicles. For this paper,
only CO2 was analyzed for environmental cost. The environmental cost used for trucks
is $0.11 per gallon at a value of $10 per ton of carbon, and the environmental cost used
for passenger vehicles is $0.10 per gallon. These values were found using Climate
Change Emission Valuation issued by the Victoria Transport Policy Institute (2012).
4.2 TRUCK COMMODITY FLOW
Another major factor that conveys the economic value of a roadway is truck flow
and its associated movement of goods. This value is indirect because roadways and users
usually do not receive any monetary value for utilization, but the net benefit to society is
substantial. The value of commodities moving through a roadway can show the value of
the roadway asset. For example, highway assets are often associated with a higher value
in asset management because they allow commodities to move from one region to
another. For this thesis, the value of commodities in truck flow is found through
summation of the different commodity types multiplied by the truck flow, as shown in
the following formula:

28
Added Truck Commodity Value = ∑ ( ) ( )
Where,
= Truck coefficient (0 to 1)
= Percentage of trucks for industry sector i
( ) = Tonnage per truck for industry sector i
( ) = Dollar value per ton of industry sector i
The industry sectors used in this study include fuel oils, gasoline, gravel, coal,
nonmetal mineral products, scrap, cereal grains, crude petroleum, machinery, electronics,
chemicals, and other. The industry sectors were picked based on ton-miles in Texas. The
sectors used come from the freight analysis framework (FAF) data for the state of Texas,
which is available through the Federal Highway Administration (FHWA) website. The
percentage of trucks in each sector can be found using state freight data from FAF, as
was the dollar value per ton. A truck coefficient from 0 to 1 can be applied depending on
how much emphasis an agency would like to place on the truck commodity value passing
over a roadway. The tonnage per truck can be specified based on the local condition
and/or available data, for this case study it was assumed to be 10 tons per truck for each
industry sector.

29
4.3 ADDED EMPLOYMENT
The existence of roadways has been proven to have an impact on job creation and
employment rates (Whitelegg 1994). Roadways often have a positive impact on
employment, especially in the case of highways, which connect users and businesses
from greater distances. It is difficult to capture the economic impact of roadways in
terms of job creation and job existence because of the amount of roadway lane-miles and
the varying factors that can contribute to job creation. The economic benefit of existing
roads must often be traced back to when the road was built and connected to the present
state. This process is cumbersome and difficult to perform because of the sheer number
of roadways in a network, therefore it was not applied in this framework.
An added employment value is given to roadways based on utilization and overall
employment in the regional area. The utilization is represented by the ratio of roadway
vehicle-miles traveled (VMT) to the total VMT for the region. The formulation of the
added employment value is as follows:
Added Employment Value = ( )
Where,
= Coefficient for employment
= Overall employment
( ) = Average salary for local area

30
The formula captures the utilization of each roadway and relates it to the income
generated in the region. It is an estimation and does not reflect an exact contribution to
employment.
4.4 ROADSIDE BUSINESSES
The final factor considered in this framework for economic evaluation is roadside
businesses. This includes all businesses adjacent to roadways that base their business at
least in part on the utilization of the roadway. For example, the profitability of gas
stations hinges directly on the number of vehicles that pass adjacent to the station. The
formulation for the roadside business added value is as follows:
Roadside Business Value = ∑ ( )
Where,
= Roadside business coefficient
( ) = Number of roadside service
businesse in type j
= Value of average business in type j
The types of businesses include Retail-Auto, Retail-Food, Retail-Other,
Hotel/Acc., Services, and Agriculture/Construction/Manufacturing. These businesses
were picked from a set of businesses used in a study by Harrison and Waldman on

31
mitigation of adverse business impacts from construction (Harrison 1998). Each type of
business is designated a value based on revenue and number of establishments from the
2007 Economic Census. The data used is for the entire United States, which provides a
rough estimate. In reality, the value for each business type can change based on location.
For example, a finance company in Manhattan would have a larger average value than a
finance company in a lower income area.
4.5 OVERALL FORMULATION
The direct and indirect economic impacts are combined into one formula as a
means to compare existing roadway assets. The formula is as follows:
Economic value = (Time Savingspv)*(VOTpv + VOCpv + ECpv)
+ (Time Savingst)*(VOTt + VOCt + ECt)
+ ∑ ( ) ( )
+ ∑ ( )
+ ( )
The formula can be weighted based on agency preference. The coefficients,
representing the relative importance, for each economic development unit can be a value
of 0 to 1. This value will change based on an agency’s strategic goals and preference
towards overlapping economic impact. Relative weights of each direct and indirect

32
impact factor can be assigned to normalize the associated coefficients for each factor. If
each coefficient were given a value of 1, the truck commodity flow value would be
significantly larger than all the other factors, rendering each other factor insignificant.
Therefore it is very important for the framework user to apply weights associated with
each factor. In addition to the economic development factors being adjustable, the value
of time, vehicle operating cost, and environmental cost can be adjusted based on agency
preference and location.

33
5. CASE STUDY
A case study was necessary to exemplify how the methodological framework
could be applied to a real world problem. The framework can be applied to asset
management problems in which limited funding allows only a small number of roadway
projects to be executed out of a large group of roadways in need of the same treatment.
A common example of this type of asset management problem is choosing roadways to
perform preventive maintenance on a limited preventive maintenance budget.
5.1 THEORETICAL EXAMPLE
In order to better illustrate the economic evaluation framework, a theoretical
analysis was performed using local area roadways. The overall formulation was applied
to five roadways as a means to compare their economic asset value. The roadways were
each a mile in length as a way to compare similar projects in need of funding. The five
roadways used range in usage, type of roadway, and location. Table 1 lists the roadways
and their description.

34
Table 1: Case Study Roadways.
Roadway Description
Mopac 1
Highway with no roadside
business access and low truck
flow
Cesar Chavez St.
Urban arterial with low truck
flow
Martin Luther King Blvd.
(MLK)
Urban arterial with low usage
and truck flow
Interstate 35 (I-35)
Highway and access road with
high truck flow
South Lamar St.
Urban arterial with low truck
flow
Each roadway is located in Austin, Texas. The exact location of each roadway
section is shown in Figure 4. As can be seen from the figure, the connectivity of the
roadway to the overall network varies by location.
Figure 4: Map of Case Study Roadways.

35
Each of the roadways was analyzed for time savings, truck commodity flow
value, added employment value, and roadside business value. Interstate 35 (I-35)
included both the highway and the access roads that run parallel with the highway.
5.2 TIME SAVINGS VALUE
The time savings were determined by creating the shortest path detour around the
roadway in consideration and comparing with the free flow travel times. The roadway
considered was assumed to require a complete detour during maintenance. The
difference between detour path travel time and original roadway travel time determined
the time savings. The times were based on free flow because congestion considerations
would become too difficult to accurately predict for this study. Creating the shortest path
detour was the closest equivalent to shutting down the roadway for maintenance. For
other studies, agencies have the ability to find the time savings value by this simple
approach or by using traffic simulation software to determine the difference in total
system travel time (TSTT). Traffic software calculations for the TSTT can improve
accuracy, but require more local traffic data and analysis time. Time savings were split
into passenger vehicles and trucks because trucks have lower acceleration, deceleration,
and turning times. Based the analysis procedure described, the time savings of each
roadway is listed in Table 2. The two highways, I-35 and Mopac, had the highest time
savings per vehicle, which is expected as they have much higher speed limits than their
surrounding roadways.

36
Table 2: Time Savings by Roadway.
Time Savings (min/veh)
Passenger Vehicle Truck
Mopac 2 3
Cesar Chavez 1 1
MLK 3 4
I-35 4 5
South Lamar 1 1
The value of time used for passenger vehicles and trucks were $12.50 and $24.70,
respectively. These values were found using U.S. DOT standard values for all purpose
travel. The vehicle operating cost and environmental cost in dollars per hour were
determined based on vehicle operating cost, carbon emission cost, and speed of the
roadway. Passenger vehicles were assumed to operate at 20 miles per gallon, while
trucks were assumed to operate at 9 miles per gallon. The tables for these values can be
found in the Appendix.
The overall time savings values for each roadway are shown in Figure 6, while
the time savings by truck and vehicle is shown in Figure 5. The highways had much
higher direct economic value. I-35 had much higher time savings value based on its
higher truck flow. MLK had a reasonably high time savings value because of the low
connectivity associated with the area around it. If MLK was closed for maintenance, the
alternative routes increase travel time more than at Cesar Chavez or South Lamar. Areas
with high connectivity and low speeds, like Cesar Chavez and South Lamar, had
considerably lower time savings.

37
Figure 5: Time Savings Value by Mode.
Figure 6: Total Time Savings Value.
Overall the travel time savings coincided well with the Average Annual Daily
Traffic (AADT), truck flow, and connectivity of the roadway in the local network. The
0
50000
100000
150000
200000
250000
300000
Mopac Cesar
Chavez
MLK I-35 South
Lamar
Time Savings Value by Mode ($)
Time Savings Value for
Passenger Vehicles
Time Savings Value for
Trucks
0
50000
100000
150000
200000
250000
300000
350000
Mopac Cesar Chavez MLK I-35 South Lamar
Total Time Savings Value ($)

38
next step in finding the overall economic value of each roadway was quantifying the
indirect economic factors; truck commodity flow value, added employment value, and
roadside business value.
5.3 TRUCK COMMODITY FLOW VALUE
The truck commodity flow value was calculated for each roadway using the
formulation previously stated. The truck flow was separated into thirteen industry sectors
shown in Table 3. Each industry sector was assigned a commodity flow value based on
domestic commodity values in Texas found using the Freight Analysis Framework.
Table 3: Commodity Values for Case Study.
Commodity
Type
Percent of
Truck Flow Value ($) Tons
Commodity
Value ($/ton)
Fuel oils 12% 33,042,390,000 52,095,590 634
Gasoline 11% 59,116,720,000 84,602,820 699
Gravel 6% 1,019,430,000 111,198,390 9
Coal-n.e.c. 9% 29,588,860,000 36,280,770 816
Nonmetal min.
prods. 5% 13,327,040,000 106,948,800 125
Waste/scrap 6% 5,732,660,000 74,716,520 77
Coal 5% 177,370,000 12,787,460 14
Cereal grains 5% 8,487,710,000 54,306,730 156
Crude
petroleum 9% 1,007,000,000 2,228,010 452
Basic chemicals 4% 19,778,130,000 21,265,020 930
Electronics 1% 50,224,870,000 3,630,030 13836
Machinery 2% 114,901,820,000 14,929,930 7696
Other 26% 520,705,960,000 356,278,240 1462

39
It was assumed that each truck carried a payload of 10 tons for each industry type.
More research needs to be done on payload tonnage by commodity type. For the purpose
of this thesis, a broad assumption of 10 tons per truck was made.
The truck commodity flow value was calculated based on the commodity values
and truck flow for each roadway. Figure 7 shows the truck commodity flow values. As
expected, I-35 had a much higher truck commodity flow value than any other roadway.
The value for each roadway mimicked the truck flow because each had the same percent
of truck flow associated with the same industry sectors. If roadways being compared for
asset valuation were in different regional locations, the industry sectors would vary and
create results likely incongruous with truck flow.
Figure 7: Total Truck Commodity Value.
Another result evident from the graph is that the overall values associated with
truck commodity flow are much higher than the amounts from time savings. This can be
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
Total Truck Commodity Value ($/day)

40
attributed to the fact that trucks carry commodities of high value. To make up for this
large difference in total dollars per day, a coefficient reflecting the relative weight must
be applied to the truck commodity value for the amount of weight an agency would like
to place on truck commodity value.
5.4 ADDED EMPLOYMENT VALUE
The added employment value was computed for each roadway and can be seen in
Figure 8. The values coincided with the AADT of the roadway. Although Mopac had
much lower economic value in terms of truck commodity flow, it had comparable value
in added employment based on the high number of passenger vehicles.
Figure 8: Total Added Employment Value.
0
50000
100000
150000
200000
250000
300000
350000
400000
Total Added Employment Value
($/day)

41
5.5 ROADSIDE BUSINESS VALUE
The final indirect economic impact factor evaluated was the roadside business
value. Only businesses that rely on traffic flow for revenue were considered. The value
placed on each type of business was estimated using 2007 economic census data and can
be seen in the Appendix. The roadside business value for each roadway is shown in
Figure 9. This result differed the most with the other economic evaluation values. South
Lamar had the highest roadside business value based on the large number of retail
businesses adjacent to the roadway. On the other hand, Mopac had no roadside business
value because no businesses relying on traffic flow lie adjacent to the roadway. It is
important to note that the access road for I-35 was included as a part of the highway. The
access road is traffic is directly affected by the flow of traffic along I-35. Therefore, the
values of businesses along the access road are a direct result of I-35 traffic flow.
Figure 9: Total Roadside Business Value.
0
50000
100000
150000
200000
250000
300000
Total Roadside Business Value ($/day)

42
5.6 OVERALL ECONOMIC VALUE
The overall economic value of each roadway was found by adjusting the indirect
economic impact values by weight factors. The direct economic impact of time savings
was kept with a weight of 1, while each indirect economic impact element was assigned a
weight of 1/3, as shown in Figure 10. This was done because without weighting the final
monetary results, the economic impact elements, particularly the truck commodity flow
value, would significantly overtake the final economic value. By weighting the indirect
economic impact elements, each element has equal impact on the final economic value.
Figure 10: Weight of Economic Impact Factors
By assigning these weights to the overall economic value elements, the
coefficients of each indirect economic element were computed. The coefficients serve to
normalize the economic values to the relative weights assigned. The coefficients for each
element are shown in Table 4.

43
Table 4: Coefficient Values for Indirect Economic Impact Factors.
Time Savings 1.0000
Truck Coefficient (cT) 0.0007
Employment Coefficient (cE) 0.1856
Roadside Business coefficient
(cR)
0.3974
The truck factor must be very low to avoid results skewed to only considering
truck commodity flow value when using this framework. The low coefficient for truck
commodity flow value is a result of the comparably high monetary values. Multiplying
the coefficient by the total amount of truck commodity flow value will return a value that
is one-third of the total direct time savings value.
The overall economic value of the roadways coincided with the overall traffic
flow of the roadways. The economic values for each roadway are shown in Figure 11.
For agency purposes, I-35 would have the highest economic value, followed by Mopac,
South Lamar, Cesar Chavez, and MLK, respectively.

44
Figure 11: Overall Economic Value.
When compared to the AADT of each roadway, the overall economic value
shows that it does not simply measure utilization. It also includes increases in value from
truck flow and roadside businesses. Figure 12 shows the overall economic value
alongside AADT amounts.
0
100000
200000
300000
400000
500000
600000
Overall Economic Value

45
Figure 12: Economic Value Compared to AADT.
I-35 saw a huge spike in value because of truck flow and roadside business along
the access road. South Lamar also saw a spike in value due to the high volume of retail
stores along the roadway. This further indicates that though traffic volume is important
to the value of a roadway, but other factors could be just as important.
0
100000
200000
300000
400000
500000
600000
Mopac Cesar
Chavez
MLK I-35 South
Lamar
$/dayandAADT
Overall Economic Value vs. AADT
Overall Economic Value
AADT

46
6. CONCLUSIONS, RECOMMENDATIONS, AND FUTURE
WORK
Economic evaluation of roadways has traditionally been used as a tool for future
development and new construction. The framework in this thesis provides an approach to
evaluating the economic value of existing roadways as a means to better preserve our
assets. Asset management has become an integral part in preserving our existing
infrastructure as investment for new construction declines.
6.1 CONCLUSIONS
Economic evaluation has been a well-accepted strategy in valuing roadway assets,
however the approach has been mostly qualitative. The practice of actually quantifying
the economic impacts of roadways is tedious and difficult to apply on a large scale. The
framework outlined can provide agencies with a way to quantify the value of roadway
assets. It was applied to a theoretical asset management problem, where an agency must
choose a roadway for construction based on value, or value added from the additional
investment on the roadway for maintenance or rehabilitation work. Several important
conclusions can be drawn from the analysis and results:
1. The methodological framework presented in this thesis is a practical tool that can
be used for economic evaluation of existing roadway assets. The framework
provides a means to quantify both direct and indirect economic impacts of
roadways. It is also is adaptable to varying agency needs. The assumptions and

47
weights assigned in the case study can be altered to reflect the needs of a
particular agency.
2. The weights associated with the application of the framework are vital to the
economic evaluation results. Agencies using this framework must identify their
most important evaluation factors and adjust the weights accordingly.
Specifically, agencies must compare importance of time savings, truck
commodity flow, added employment, and roadside businesses.
3. Each element of the framework can be looked at individually to help decision
makers make a better informed choice. Certain geographic areas or types of
agencies may just be interested in an individual factor of roadway economic
value, whether it is truck flow commodity value, added employment value, or
roadside business value. Each component can be looked at individually to make a
more informed decision.
4. Economic value of existing roadways can only be an estimate. There are so many
existing roadway assets and varying types of roadways that quantifying an
economic value for each can only be looked at as an estimate and not a definite
amount. In addition, some factors, like city to city connectivity or tourism, cannot
be adequately quantified readily in a framework. It is important that the economic
value be used for decision making and comparison rather than as a “concrete”
value.

48
6.2 RECOMMENDATIONS
The use of economic evaluation of roadways in asset management is very limited.
Agencies continue to rely on book value and replacement cost to evaluate roadways,
which fail to capture the utilization and economic impact. Several recommendations can
be reached from this paper including:
1. State DOTs should incorporate economic evaluation of existing roadway assets
into their asset management program. Book value and replacement cost fail to
adequately characterize the economic importance of existing roadways. This type
of economic evaluation framework can be used to capture the utilization of the
roadway using both direct and indirect economic impacts. Decision makers can
use economic evaluation to better understand how maintenance and rehabilitation
on particular roadways will affect the local economy.
2. Agencies should explore the relationship between transportation assets and the
functioning economy. There has been work done relating some transportation
venues to the economy, but most of the work focuses on general state of
transportation and macroeconomics. Understanding the relationship between
local roadway condition, such as its connectivity, and economic prosperity could
enhance our ability to provide optimal transportation systems.
3. Greater importance should be placed on the indirect economic impacts of
roadways. Many agencies focus on the direct economic impact of time savings
and neglect indirect consequences. The indirect economic impacts can be very
large with the increasingly connected transportation network.

49
6.3 FUTURE WORK
Though this thesis offers a framework for applying economic evaluation to
existing roadways, there are still many issues that need to be addressed. There are areas
that require more research and discussion.
Additional indirect economic impact factors could be applied to the framework if
there was a method of quantification. This includes connectivity, land value, tourism,
and large scale production. Each of these factors has an economic value to society and
relies on the use of the roadway network, but is difficult quantify a dollar amount. Many
indirect factors are interconnected, where one factor is dependent on a range of other
factors. For example, large scale production is dependent on connectivity of a network,
roadside businesses, tourism, and time savings. The interdependency among economic
factors needs to be studied further.
There are several assumptions made in the framework that need further research.
For the purpose of the framework, the values associated with the assumptions can be
altered to better suit an agency, however, more work needs to be done in finding more
accurate assumptions. For instance, the payload for truck commodity flows was given
the same value across several industries, which may not be very realistic. In time savings
value, the time savings was based on free flow detour times. A more realistic approach
for an agency would be to find the change in total system travel time in performing
maintenance or rehabilitation on that roadway. Agencies often have data and software
enabling this more accurate estimate. In roadside business value, business value was
based on typical U.S. business revenue and number of establishments. The values could
be more accurate if work was done on finding typical regional values, or relating the
business value to the real estate value.

50
Finally, more work needs to be done on implementation techniques for using
economic evaluation at agencies. The framework provides a means to estimate the
economic value and adjust factors based on local conditions, but it does not look at the
current available data at agencies or a systematic approach in implementing this form of
asset management. The issues in implementation would need to be identified and
addressed in order to put in place a more functioning product.

51
APPENDIX
Table 5: VOT, VOC, and EC for Case Study.
Passenger
Vehicles Trucks
Value of Time $12.50/hour $24.70/hour
Vehicle Operating Cost $0.20/mile $0.40/mile
Environmental Cost $0.10/gallon $0.11/gallon
Table 6: Mopac Truck Commodity Value.
Mopac
Total Truck Flow 2920
Commodity Type Percent of Truck Flow
Truck Flow by
Commodity
Commodity Value
($/day)
Fuel oils 12% 346 2196994
Gasoline 11% 313 2183741
Gravel 6% 175 16018
Coal-n.e.c. 9% 254 2075076
Nonmetal min.
prods.
5% 138 172060
Waste/scrap 6% 167 128412
Coal 5% 149 20735
Cereal grains 5% 134 208857
Crude petroleum 9% 256 1156802
Basic chemicals 4% 127 1183254
Electronics 1% 33 4559336
Machinery 2% 55 4271085
Other 26% 772 11286155
Total Value 29458525

52
Table 7: Cesar Chavez Truck Commodity Value.
Cesar Chavez
Commodity Type
Percent of Truck
Flow
Truck Flow by
Commodity
Commodity Value
($/day)
Fuel oils 12% 64 406228
Gasoline 11% 58 403778
Gravel 6% 32 2962
Coal-n.e.c. 9% 47 383685
Nonmetal min. prods. 5% 26 31814
Coal 5% 28 3834
Machinery 2% 10 789731
Other 26% 143 2086830
Total Value 5446933

53
Table 8: MLK Truck Commodity Value.
MLK
Commodity Type
Percent of Truck
Flow
Truck Flow by
Commodity
Commodity Value
($/day)
Fuel oils 12% 49 309034
Gasoline 11% 44 307170
Gravel 6% 25 2253
Coal-n.e.c. 9% 36 291885
Nonmetal min. prods. 5% 19 24202
Coal 5% 21 2917
Machinery 2% 8 600781
Other 26% 109 1587536
Total Value 4143704

54
Table 9: I-35 Truck Commodity Value.
I-35
Truck Flow by
Commodity
Commodity Value
($/day)
Fuel oils 12% 2001 12688610
Gasoline 11% 1805 12612066
Gravel 6% 1009 92512
Coal-n.e.c. 9% 1469 11984475
Nonmetal min.
prods.
5% 797 993722
Coal 5% 863 119755
Machinery 2% 321 24667397
Other 26% 4460 65182516
170135950

55
Table 10: South Lamar Truck Commodity Value.
South Lamar
Truck Flow by
Commodity
Commodity Value
($/day)
Fuel oils 12% 85 537124
Gasoline 11% 76 533884
Gravel 6% 43 3916
Coal-n.e.c. 9% 62 507317
Nonmetal min.
prods.
5% 34 42065
Coal 5% 37 5069
Machinery 2% 14 1044200
Other 26% 189 2759253
7202055
Table 11: Employment and Vehicle Miles Traveled for Case Study.
Daily VMT County VMT Overall Employment
Mopac 139070 25593491 623598
Cesar Chavez 27000 25593491 623598
MLK 15800 25593491 623598
I-35 167000 25593491 623598
South Lamar 42000 25593491 623598

56
Table 12: Roadside Business Revenue.
Revenue ($) Number of Establishments
Retail-Auto 85887165000 165552
Retail-Food 2.07636E+11 408806
Retail-Other 3.91766E+12 1128112
Service 4.50413E+11 118756
Hotel/Acc. 1.8E+11 62000
Agr./Con./Man. 2.38264E+12 332530
Table 13: Roadside Businesses for Roadways in Case Study.
Retail-
Auto
Retail-
Food
Retail-
Other
Hotel/Acc. Service Agr./Con./Man.
Mopac 0 0 0 0 0 0
Cesar
Chavez
0 8 1 2 0 1
MLK 3 2 1 0 0 0
I-35 2 2 1 3 3 0
South
Lamar
12 13 20 0 3 0

57
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