Transportat projects of significant size and scope often must be subjected to fairly rigorous project evaluation processes. Benefit-cost analysis (BCA) is a project evaluation method employed by many organizations for screening projects that represent major investments of resources. In theory, the information acquired through BCA or similar procedures yields value by reducing the uncertainty surrounding the choice between competing alternatives. Given that the evaluation process itself requires extensive data collection and analysis, it consumes valuable resources that, in and of themselves, have opportunity costs. When should this type of evaluation be employed? What type of value does it provide? Is it worthwhile for projects that represent smaller investments? How detailed should the evaluation be? These are the types of questions that this research proposes to provide more concrete answers to.
In terms of evaluating the use of Benefit/Cost Analysis (BCA), this research will draw on existing projects for which an ex ante BCA was completed. It will identify projects where multiple alternatives were defined and analyzed, where “alternative” can be used to indicate a build vs. no-build option or different alignment options for the same project. Using operational data following implementation, the research will identify 1) How correct the analysis was. That is, how closely did actual results conform to those identified in the ex ante evaluation, and were the actual benefits higher or lower than anticipated. Also, the research will identify 2) If the best alternative was chosen how large were the net benefits relative to the second-best alternative identified. This value will provide an estimate of the benefits to be gained by conducting the analysis. A related question that may be important to ask in each case is whether the result of the ex ante BCA affected the outcome of the choice between alternatives and, if it did not, what other criteria were deemed important in the final decision.
The opportunity ID for this research opportunity is 2227