METHODOLOGY FOR COMPARATIVE ECONOMIC ANALYSIS OF CONSTRUCTION AND TSM ALTERNATIVES

E D. Legett

Document Type

Journal Article

Publication Date

1984

Subject Area

infrastructure - vehicle, ridership - commuting, organisation - management

Keywords

Vehicle occupancy, TSM, Transportation systems management, Transportation system management, Transportation economics, Transport economics, Trade off analysis, Staggered work hours, Road engineering, Rate of return, Project management, Operations research, Operational research, Natural earth crust materials, Mode share, Modal split, Investments, Investment requirements, Highways, Highway systems, Highway engineering, Economics, Earths crust, Cost benefit analysis, Construction projects, Construction, Comparison studies, Comparative analysis, Capital intensive construction, Benefit cost analysis, Analysis, Alternatives analysis

Abstract

In order to assess the difference in economic effects between construction projects and non-construction TSM investments, an economic analysis was conducted using the traditional "benefit-cost" (B/C) method. The TSM investments consist of costs required to fund a staggered work hours (SWH) program, increasing the vehicle occupancy rate (VOR), and increasing the transit mode split. This method determines the ratio of benefits to cost after each project/alternative has been discounted with respect to its expected life at a minimal attractive rate of return (i.e., all projects/alternatives were discounted to an equivalent uniform annual cost based on an expected life of 20 years and a minimal attractive rate of return of 10%). Projects with B/C ratios greater than one ( > 1.0) are considered economically attractive while those with B/C ratios less than one ( < 1.0) are considered not to be economically efficient.

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