2013 Session: 298

• Charging for Road Use When Road Systems HaveMultiple Independent Road Owners
  Abstract: The dedicated, unindexed fuel taxes commonly used to charge for road use in the United States and Canada are generally considered to be unsatisfactory because, with falling fuel consumption, they do not raise sufficient revenues. They are also unsatisfactory because they cannot function as effective prices for road use, which prevents roads from becoming part of the market economy.This paper reviews the ways in which flexible, autonomous charging methods and technologies can operate within a single, interoperating charging system, permitting road-use charging on any configuration of private, state, regional or municipal road, with minimal roadside infrastructure. Payments by road users would be made to “Payment Operators” who would aggregate the amounts payable for the use of specific road segments and credit the individual road owners with the amounts due to them.After setting out some essential criteria for national (even international) mileage-based user fee (MBUF) systems, the paper describes “thick” and “thin” “autonomous” road use metering. It concludes that only thick, autonomous systems can meet these criteria, and that, to reduce their costs, MBUF systems should be offered in conjunction with benefits desired by road users, such as insurance premiums based on distance travelled. The paper also suggests that such new charging methods should be introduced on a voluntary basis, giving road users the choice of using one of them before the existing one (fuel taxes) is replaced, and that private firms should be invited to offer these new payment systems in conjunction with appropriate incentives.
  Authors: Grush, Bern; Roth, Gabriel J.
  Authors: Grush, Bern; Roth, Gabriel J.
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-1778
• Highway Capital Expenditures and Induced Vehicle Travel
  Abstract: We investigate the effects of public capital investment on the demand for travel. We define capital stock as a productive flow that accounts for the physical deterioration of infrastructure over time. We present a framework where additions to capital stock only cover a portion of the long-run equilibrium level, and where policy decisions are dictated by expectations of economic and travel growth. To the extent that these investments increase productivity, they generate induced travel. Using a panel dataset at the state level for the period 1982-2005, we find that the elasticity of travel demand with respect to changes in state highway capital stock is equal to 0.041in the short run, while the long-run is 0.237. Our results show that changes in capital expenditures in response to past levels of traffic are characterized by a three-year lag, suggesting that the investment response to changes in travel is slow to converge to the desired long-run levels.
  Authors: Concas, Sisinnio
  Authors: Concas, Sisinnio
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-1568
• Explaining Willingness-to-Pay for Tolls: Individual Self-Interests, Concern for Greater Good, and Sociopolitical Factors
  Abstract: This research examines citizen acceptance of tolls and road pricing, and specifically focuses on determinants of the individual’s expressed willingness-to-pay tunnel tolls to use an express lane which would be free of traffic delays. We answer the research question “What factors influence citizens’ willingness-to-pay tolls” by empirically estimating a model of willingness-to-pay being influenced by three factors: (a) individual self-interest; (b) the greater public good; and (c) socio-political variables. We use data about citizen perceptions from the Life in Hampton Roads Survey, which is a survey of 700 residents of Hampton Roads, Virginia. We find that willingness-to-pay is primarily driven and motivated by self-interest, through the anticipated direct cost and benefits of tolls to be borne by the individual. In addition, concern for the greater good also contributes to willingness-to-pay. The individual’s perception of government’s trustworthiness, and characteristics of the individual (race and education) also influence the extent to which an individual is willing to pay tolls.
  Authors: Yusuf, Wie; O'Connell, Lenahan; Anuar, Khairul A; Gable, Matthew
  Authors: Yusuf, Wie; O'Connell, Lenahan; Anuar, Khairul A; Gable, Matthew
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-2317
• Transportation Infrastructure, Industrial Productivity, and Return on Investment: A Spatial Spillover Approach
  Abstract: This study examines the North American Industrial Classification System (NAICS) based Manufacturing Industry (NAICS 31-33) from 1997-2010 in a cost-based framework. We first construct and estimate both profit and production function models for the US manufacturing industry at the state level that allow for spatial spillovers and interactions. Utilizing profit and production provides an alternate approach to the dual cost function. Through the inclusion of transportation infrastructure spending data we are able to determine elasticities associated with infrastructure investment and industry total costs. The results of the spatial econometric models and the computed elasticities are then delivered in a Geographic Information System.
  Authors: Eloff, Jeffrey J.; Smirnov, Oleg A.; Lindquist, Peter S,.
  Authors: Eloff, Jeffrey J.; Smirnov, Oleg A.; Lindquist, Peter S,.
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-2812
• How Do Drivers Respond to Risk and Ambiguity in Travel Times? Empirical Approach to Behavioral Decision Theories
  Abstract: Drivers’ route choice behavior has been a subject of research for a very long time now. Existing efforts in this area mostly involved models that simplified drivers’ decision process by assuming travelers to have definite information about travel times on various routes. The driving force behind these models has been economic rationality, which follows the principles of rational theory. However, random disruptions in traffic, both expected and unexpected, make traffic networks uncertain and drivers’ route-choice behavior may drift away from rationality. Therefore, efforts should be made to advance existing route-choice models by exploring the use of theories in other fields of science, like psychology, where it has been well established that peoples’ attitudes are often influenced by behavioral factors like subconscious perceptions and risk preferences. The goal of this research is to cross-fertilize state-of-the art behavioral theories and random utility based route choice models to measure drivers’ route choice attitudes toward travel time uncertainty. The route choice attitudes are elicited through stated preference surveys. Non-linear logit models are formulated that incorporate probability weighting, and risk and ambiguity attitudes (two aspects of uncertainty) with a goal of adding behavioral rigor existing random utility framework. Most importantly, willingness to pay values are derived for uncertain routes that are more behaviorally appealing. Finally, the results are applied in the context of variable tolling via illustrative examples.
  Authors: Sikka, Nikhil; Hanley, Paul F.
  Authors: Sikka, Nikhil; Hanley, Paul F.
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-3184
• Comparison of Travel Time Indexes and Other Travel Time Reliability Measures Using Florida Freeway Spot Speed Data
  Abstract: Travel time reliability is a congestion measure that is becoming increasingly important to public agencies, elected officials, and particularly the traveling public. The travel time reliability concept for highways is about a decade old and continues to be explored and advanced primarily through research programs sponsored by the Strategic Highway Research Program 2 (SHRP2) and FHWA. Travel time reliability expands beyond traditional congestion measures that focus solely on recurring congestion to capture the effects of non-recurring events including incidents, weather, special events, and construction over the period of a year. A comparison of different travel time reliability measures would help agencies better understand the meaning and difference of using different reliability measures. This allows agencies to select and report one or two reliability measures when evaluating roadway operations. The Florida Statewide Transportation Engineering Warehouse for Archived Regional Data (STEWARD) (1) was used in this study for the Florida Department of Transportation. Based on the spot speed sample data, the study found that 90th Percentile Travel Time Index (ratio of the 90th percentile of travel time in peak period to free flow travel time) was the most “sensitive” and “consistent” reliability measure for Florida freeways.
  Authors: Jin, Li; McLeod, Douglas S.
  Authors: Jin, Li; McLeod, Douglas S.
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-3338
• Eliciting Risk Attitudes from Route Choice over Simulated Driving Choices
  Abstract: Transportation planners and engineers alike have identified that drivers’ risk attitudes have a significant effect on their route and departure time choices. Our research question is: Are subjects’ risk attitudes different across different geographic traffic regions? If risk attitudes are reasonably accurate across regions then traffic planners will not need to conduct full scale measurements for every new region where a transportation policy needs to be evaluated. To answer the research question, we utilize methods from experimental economics to elicit risk attitudes through controlled incentivized experiments in driving simulators with actual monetary consequences for subjects. Providing monetary incentives has been found to eliminate hypothetical biases observed in other studies that utilize purely hypothetical questions. In addition, we use structural estimation to predict risk attitudes in our sample. Our econometric approach applies the “contextual utility” correction by Wilcox (2011) to control for “size effects” that have been identified in the estimation of value of time and reliability. Although risk attitudes are heterogeneous in our sample and largely explained by subjects’ age and accumulated income during the experiment, we find no evidence of a structural difference between the two traffic regions used in this study.
  Authors: Dixit, Vinayak V.; Harb, Rami Charles; Martinez-Correa, Jimmy; Rutstrom, Elisabet
  Authors: Dixit, Vinayak V.; Harb, Rami Charles; Martinez-Correa, Jimmy; Rutstrom, Elisabet
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-3585
• Gasoline Price Volatility and the Willingness to Support Investment in Mass Transit
  Abstract: The determinants of public opinion toward public transit is a little-researched topic, though a more thorough understanding of what makes consumers willing support transit may reveal which attributes consumers value most. In this paper, I hypothesize that one determinant of people’s willingness to support mass transit investment is the economic climate surrounding the use of transit’s principal competition—the car. In this case, I examine the cost of gasoline. I hypothesize that fuel price volatility, rather than gasoline price itself, will be positively associated with a stated support for more mass transit funding. That is: as the price of gasoline becomes more uncertain, the public should, all else equal, support investment in forms of transportation that provide consumers with some measure of protection from the price of fuel. Results suggest a strong effect of price volatility on consumers’ willingness to support transit expenditures, and no effect of price itself.
  Authors: Smart, Michael
  Authors: Smart, Michael
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-4740
• Benefits and Costs of Electric Vehicles for Public Finance: Integrated Valuation Model and Application to France
  Abstract: The upcoming launch of electric vehicles has financial impact on the public budget of a given country. Replacing a combustion engine vehicle by an electric vehicle entails fiscal effects not only due to announced supportive policy measures but also due to industrial factors that reflect changes in the manufacturing of a vehicle and in the provision of products and services throughout the vehicle’s operating life. Existing financial analyses have so far either only focused on the ‘obvious’, direct financial impacts resulting from policy measures, or have taken a socio-economic welfare approach incorporating environmental costs and benefits. Industrial factors have, to our knowledge, been left aside so far. This study delivers an exhaustive economic analysis taking all direct and indirect financial impacts of the introduction of electric vehicles on the public budget into account. Direct impacts refer to financial transfers due to subsidies and tax breaks. Indirect impacts refer to industrial factors which entail implications for i) the employment situation and therefore for salaries, social contributions by employers and employees and unemployment benefits and ii) tax revenues on the consumption side (VAT) and the production side. The valuation method is based on an input-output model of the productive economy, combined with mechanisms of fiscal and social transfer. The methodology is applied to France. Scenarios that vary assumptions on whether vehicle manufacturing and usage is taking place in- or outside the country are developed and analysed by their fiscal impact on the public budget.
  Authors: Windisch, Elisabeth; Leurent, Fabien M.
  Authors: Windisch, Elisabeth; Leurent, Fabien M.
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-2521
  Practice-Ready: Yes
• Implementing Marginal-Cost Vehicle Mileage Fees on Maryland Statewide Road Network
  Abstract: Vehicle mileage fees or similar user-based road charge could be an effective supplement or replacement of the current fuel tax on the nation’s highways and bridges. At the same time, properly structured mileage fee systems may help transportation professionals and officials at all levels address prominent issues such as funding gap, traffic congestion, and emissions. In theory, vehicles should be assessed a user fee equivalent to the full marginal cost not already borne by the users. This paper first estimates the full marginal cost of auto and truck travel in different time periods on all roadways in Maryland, and evaluates the impacts of such marginal-cost vehicle-miles-traveled fees (VMT fees) on travel behavior, revenue generation, equity, pollution, and GHG emissions both in Maryland and in the surrounding States of Delaware, Pennsylvania, Virginia, West Virginia, and the District of Columbia (DC). Results show that with consideration of all driving externalities, the marginal-cost VMT fee for auto (truck) travel in Maryland during peak periods ranges from 0.20~12.16 (3.91~45.33) cents/mile. Compared to the existing revenue policy, the marginal-cost VMT fee can reduce overall vehicle miles traveled by 7.65% in the multi-state region covered by the quantitative model, by 7.81% just in Maryland. In addition, air pollution and GHG emissions in Maryland can be reduced by 7.62% to 9.42% by pollutant type. Total revenue generation would increase by about 168% from that under the existing revenue policy (including fuel taxes and sporadic bridge/roadway tolls). In terms of income equity, the middle-income group would be hurt the most with the largest consumer surplus decrease, while the highest income group is hurt the least. Results also indicate that the proposed marginal-cost VMT fee in Maryland can affect the neighboring states to varying degrees. For instance, vehicle miles traveled reduction ranges from 0.02% to 1.35% in the neighboring four states and DC, and their revenue generation changes by -1.48% to 0.15%.
  Authors: Zhang, Lei; Lu, Yijing
  Authors: Zhang, Lei; Lu, Yijing
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-3171
  Practice-Ready: Yes
• Economic Assessment of Public Rest Areas and Traveler Information Centers on Limited-Access Freeways
  Abstract: Public rest areas located along limited access freeways throughout the United States allow quick access and free 24-hour availability to basic amenities, such as parking and restrooms. The recent economic downturn has made it increasingly difficult for state agencies to maintain a network of rest areas, forcing many states to consider downsizing services or closing facilities. Although rest areas provide many intrinsic benefits to motorists, the safety and economic impacts associated with rest areas and traveler information centers have proven to be difficult to quantify. A benefit/cost analysis methodology was developed for public rest areas and traveler information centers located on limited access freeways. This methodology considered a broad range of benefits associated with public rest areas, including travel diversion savings, comfort and convenience benefits, and crash reductions. Increased tourism spending was also considered for traveler information centers. The costs were almost exclusively related to those incurred by the agency, which included construction, rehabilitation, operation, and routine maintenance. The methodology was demonstrated using data provided by the Michigan Department of Transportation. The benefit/cost ratio for the 58 Michigan public rest areas on limited access freeways ranged from 1.24 to 5.89 with an average of 3.36. The benefit/cost ratio for the nine traveler information centers ranged from 1.10 to 7.02 with an average of 4.00. A majority of the overall benefits for standard rest areas originated from a combination of comfort/convenience for patrons (i.e., the “value” to users) and a reduction of fatigue-related crashes, which were estimated at slightly greater than two crashes reduced per facility per year. Additional wages, benefits, and tax revenue resulting from increased tourism spending comprised a large portion of the benefits estimated for traveler information centers. As the estimated benefits were strongly correlated with annual utilization of the facility, the facilities with the highest B/C ratios included heavily utilized facilities located on the primary freeway routes. Those with the lowest B/C ratios were underutilized facilities with high operation and/or maintenance costs.
  Authors: Gates, Timothy J.; Savolainen, Peter Tarmo; Datta, Tapan K.; Todd, Ryan G.
  Authors: Gates, Timothy J.; Savolainen, Peter Tarmo; Datta, Tapan K.; Todd, Ryan G.
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-3257
  Practice-Ready: Yes
• Benefit Transfer Approach to Evaluate Livability Benefits of Transit Projects in Benefit-Cost Analysis
  Abstract: The United States Department of Transportation (USDOT) is seeking to refine guidance to states and localities on Benefit Cost Analyses (BCA) methods. The purpose of the request is to improve the quality and consistency of transportation grant applications received by the Department, most recently under the Transportation Investment Generating Economic Recovery (TIGER) program. One of the heated topics regarding BCA methods is the estimation of livability benefits. People place a value on their assessment of the quality of life in an area, which can include a sense of overall attractiveness of the physical place and a sense of community cohesiveness. These aspects are significantly influenced by individuals’ mobility to and access in the surrounding communities. Economics practice has favored the estimation of these benefits through analyzing changes in property values, as this provides value capture evidence for policy makers to justify the investment. In particular this approach suggests the value of all the amenities generated by a transit project may be capitalized in the increased value of nearby properties, which after the improvement are located in place that is more ‘livable.’ This research connects consumer demand and value of livability through benefit transfer in a BCA framework. The importance of this work derives in part from the large effect that livability benefits can have on the economic evaluation of the project.
  Authors: Ko, Kate
  Authors: Ko, Kate
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-4459
  Practice-Ready: Yes
• Are Transport Cost-Benefit Analyses Robust?
  Abstract: Cost-benefit analysis (CBA) is often used for evaluating transport investments. They often play an especially important role when many suggested investments need to be ranked against each other, for example in national investment planning. However, they are often questioned based on the claim that the ranking depends crucially on uncertain assumptions about the future, and on methodologically or ethically contestable trade-offs of different types of benefits relative to each other, for example travel time savings, traffic safety and emissions. This paper studies the robustness of CBA rankings with respect to two types of uncertainties: future climate policy and relative benefit valuations, using CBAs of 480 suggested road and rail investments in Sweden that have been shortlisted for possible inclusion in the national transport investment plan. First, the CBA ranking turns out to be surprisingly robust with respect to various assumptions regarding future climate policy. Even rather drastic assumptions, such as a doubled oil price, hardly affect investment ranking at all. Second, the CBA ranking also turns out to be robust to relative valuation of different types of benefits – person travel time savings, traffic safety, emissions and freight benefits. We also compare two sets of travel time valuations against each other, one of which differentiated with respect to mode and travel purpose and one which is not, again concluding that the investment ranking is hardly affected.
  Authors: Eliasson, Jonas; Börjesson, Maria Magdalena; Lundberg, Mattias
  Authors: Eliasson, Jonas; Börjesson, Maria Magdalena; Lundberg, Mattias
  Year: 2013
  Document Type: Paper
  Subject: Economics
  Session: 298
  Paper Number: 13-3620
  Practice-Ready: Yes
• Highway Capital Expenditures and Induced Vehicle Travel
  Authors: Concas, Sisinnio
  Authors: Concas, Sisinnio
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-1568
• Implementing Marginal-Cost Vehicle Mileage Fees on Maryland Statewide Road Network
  Authors: Lu, Yijing
  Authors: Lu, Yijing
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-3171
• Economic Assessment of Public Rest Areas and Traveler Information Centers on Limited-Access Freeways
  Authors: Gates, Timothy
  Authors: Gates, Timothy
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-3257
• Comparison of Travel Time Indexes and Other Travel Time Reliability Measures Using Florida Freeway Spot Speed Data
  Authors: Jin, Li
  Authors: Jin, Li
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-3338
• Transportation Infrastructure, Industrial Productivity, and Return on Investment: A Spatial Spillover Approach
  Authors: Eloff, Jeffrey
  Authors: Eloff, Jeffrey
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-2812
• Eliciting Risk Attitudes from Route Choice over Simulated Driving Choices
  Authors: Harb, Rami
  Authors: Harb, Rami
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-3585
• Benefit Transfer Approach to Evaluate Livability Benefits of Transit Projects in Benefit-Cost Analysis
  Authors: Ko, Kate
  Authors: Ko, Kate
  Year: 2013
  Document Type: Presentation; Poster
  Subject: Economics
  Session: 298
  Paper Number: 13-4459