The Highway Safety Manual (HSM) lists four different methods for determining the change in crash frequency in order of reliability. Currently, the Utah Department of Transportation (UDOT) uses the fourth reliable method. The goal of this research was to develop a tool that the most reliable method mentioned in the HSM could be used to perform life-cycle benefit-cost analyses. A spreadsheet program was built that performs the HSM's Part C Predictive Method for 11 different roadway segment types mentioned in HSM using Excel macros and Visual Basic for Applications (VBA) programming. Intersections were not included in this spreadsheet program as they were not included in the Utah Crash Prediction Model (UCPM) or the Utah Crash Severity Model (UCSM) at the time of this research. The methodology for analysis was set up to become part of the use of the models in selecting countermeasures. The concept and spreadsheet layout are discussed using the rural two-lane two-way (TLTW) highway spreadsheet as an example. Three examples are presented in this thesis, which are a case of rural TLTW highway, a case of five-lane urban arterial with a two-way left-turn lane (TWLTL), and a case of a freeway segment, each with two selected countermeasures to compare their benefit-cost ratios (BCRs). One important aspect associated with life-cycle benefit-cost analysis of safety related improvements is the cost of countermeasures. The spreadsheets developed in this research can predict the benefits associated with a countermeasure following the methods found in the HSM; however, it does not include a module to estimate costs associated with a countermeasure to be selected because costs of countermeasures are dependent on the way such improvements are included in construction contracts. The engineer should seek guidance from the cost estimate expert within the agency or outside consultants when determining the project costs.

The appraisal or the feasibility of an engineering venture or an investment relies on the estimation of the analysis parameters, which usually occur in the future. All such estimates have an element of uncertainty which needs to be acknowledged. Traditional methods of engineering economic or discounted cash flow analysis, for example, net present value, benefit/cost ratio, internal rate of return and payback period, do not take into account the uncertainty associated with the analysis parameters. To this end, the present study proposes a number of evaluation methodologies in order to deal with the inherent uncertainty. The present study uses second-order moment thinking to determine the expected value and the variance of feasibility measures, net present value, benefit/cost ratio, internal rate of return and payback period. A venture???s feasibility is defined in this study as the probability of the total benefit exceeding the total cost, the probability of the internal rate of return being greater than a specified interest rate, or the probability of the payback period being less than a specified time period. However, the determination of the variance of these measures requires the estimation of the correlation coefficients between the benefits and costs. The task of estimating correlation coefficients is difficult without making certain assumptions. An examination of the degree of correlation is presented which can be used for guidance in feasibility studies. The present study also gives a theoretical formulation for feasibility for single and multiple ventures and supports this with representative results based on case studies. Such a formulation resolves which combination of ventures is best from a viewpoint of feasibility. Additionally, venture appraisal is modelled as a system with Markov properties. When analysis parameters such as the interest rate, benefits and costs are defined as states, with the associated transition probabilities from one period of time to another, Markov chains can be used to estimate a venture???s feasibility. This provides further insight into the influence of variability in the analysis parameters, and provides the solution to the problem of the determination of the optimal policy, which maximises the expected net present value or the venture's feasibility over its life span. Markov chains provide further insights into the effect of the inter-temporal correlation coefficients on the variance of the net present value. When each state is taken to represent a different value of inter-temporal correlation coefficient, and consequently a different variance, it is possible to evaluate the venture's expected variance and the variance of the variance of the net present value, according to the transition probabilities associated with each state.

Transport infrastructure investment decision making is typically based on a range of inputs such as social, environmental and economic factors. The benefit cost ratio (BCR), a measure of economic efficiency (“value for money”) determined through cost benefit analysis (CBA), is dependent on accurate estimates of the various option costs and net social benefits such as reductions in travel time, accidents, and vehicle operating costs. However, most evaluations are deterministic procedures using point estimates for the inputs and producing point estimates for the outputs. Transport planners have primarily focused on the cost risks and treat risk through sensitivity testing. Probabilistic risk analysis techniques are available which could provide more information about the statistical confidence of the economic evaluation outputs. This research project report investigated how risk and uncertainty are dealt with in the literature and guidelines. The treatment of uncertainty in the Nelson Arterial Traffic Study (ATS) was reviewed and an opportunity to apply risk analysis to develop probabilities of sea level rise impacting on the coastal road options was identified. A simplified transport model and economic evaluation case study based on the ATS was developed in Excel to enable the application of @RISK Monte Carlo simulation software. The simplifications mean that the results are not comparable with the ATS. Seven input variables and their likely distributions were defined for simulation based on the literature review. The simulation of seven variables, five worksheets, and 10,000 iterations takes about 30 seconds of computation time. The input variables in rank order of influence on the BCR were capital cost, car mode share, unit vehicle operating cost, basic employment forecast growth rate, and unit value of time cost. The deterministically derived BCR of 0.75 is associated with a 50% chance that the BCR will be less than 0.6, although this probability is partly based on some statistical parameters without an empirical basis. In practice, probability distribution fitting to appropriate datasets should be undertaken to better support probabilistic risk analysis conclusions. Probabilities for different confidence levels can be reported to suit the risk tolerance of the decision makers. It was determined that the risk analysis approach is feasible and can produce useful outputs, given a clear understanding of the data inputs and their associated distributions.

The aim of this study is to evaluate an alternative socio-economical valuation method (i.e., Hybrid Real Options, HRO) to the traditional benefit cost method (CBA) for the evaluation of investments within Intelligent Transportation Systems (ITS). The proposed alternative method will be evaluated by the use of a case study where it is applied and compared to the results of the traditional method. The case study evaluates the socio-economical effects of an investment in Variable Speed Limits along a section of the motorway E18. The results of the study shows that the choice of evaluation methods affects both the investment strategy and the estimated socio-economical benefits of the investment. Using the HRO method yields twice as high socio-economical benefits compared to the CBA method. The main reason for this being that HRO account for risk and uncertainties wheras CBA only accounts for the most probable outcome of the investment. The choice of method is a complex task that involves many stakeholders however a more critical approach to the choice of socio-economical evaluation method is advocated based on the results of this study.

Master of Science / Department of Agricultural Economics / John M. Crespi / The objective of this analysis is to develop a demand model for the Sunsweet Cooperative and from this model, determine if the benefits to Sunweet’s advertising, as measured by the change in revenues, exceed the advertising costs. Weekly retail scanner data from July 20, 2008 through June 13, 2010 were used. Ordinary least squares regression equations were estimated to determine the overall demand for Sunsweet dried prunes. Two different models were estimated, one for Sunsweet’s overall prune demand and another for the Sunsweet’s Ones product. The advertising elasticity for the total dried prune demand was 0.10 and for the Ones product was 0.24. The demand equations demonstrated that Sunsweet’s advertising expenditures are increasing the overall demand for their dried prunes and their specific Ones product. What cannot be determined from the demand estimations is whether increase in revenues was greater than the cost of the advertising program. This is an especially important question for Sunsweet as it can be discerned from the data that Sunsweet’s advertising expenditures are quite large as a fraction of its revenues when compared with other similar food sellers. Using the regression equations, a benefit-cost simulation was conducted. We developed a measure that tells us how much the quantities sold of prunes would be affected by increased advertising expenditures by Sunsweet while taking into account the costs of advertising under an assumption of monopolistic competition. Two different scenarios were evaluated, one with a shutdown condition that did not allow average revenue to be below average cost and another without this shutdown condition. The total Sunsweet prune model resulted in an average benefit cost of 2.143 with the shutdown constraint and 1.845 without the shutdown constraint. The Ones product model resulted in an average benefit-cost estimate of 2.672 with the shutdown constraint and 2.358 without the shutdown constraint. Overall these ratios are good for a company operating under monopolistic competition and suggest that for every dollar spent on the advertising campaign, the average return was near to or greater than $2. Overall our analysis showed that Sunsweet’s advertising expenditures are increasing their overall demand and their benefits of advertising are exceeding their costs of advertising.

The U.S. Army Corps of Engineers is a federal agency with a mission to develop water resource projects to benefit the nation. Some of its large scale projects have been built to benefit cities, but through unintended consequences have caused economic and environmental damages. For example, its control of Mississippi River flooding has protected the City of New Orleans, but contributed to land loss in coastal Louisiana, and by some accounts, made the population more susceptible to hurricane damage. The agency has now embarked on a mission to restore some of the damaged environmental areas. This dissertation evaluates whether policies and practices used by the agency to evaluate and select plans to implement is logically flawed and could produce suboptimal project selection. The primary issue is the practice of including only implementation costs in the analysis while excluding other positive and negative economic impacts. A case study is performed using the method to evaluate a traditional economic development project for which optimal project selection has already been determined using widely accepted benefit-cost practices. The results show that the Corps' environmental project evaluation method would cause rejection of the most efficient plan. The loss of welfare that would result from using this technique is measured by comparing the welfare gain of the optimal project to the welfare gain of the suboptimal projects which could be selected using the flawed methodology. In addition, the dissertation evaluates whether suboptimal results could be produced using two other current Corps policies: selecting projects based on production efficiency, and the exclusion of environmental benefits from the discounting process. For the first policy, a simple counter example shows how clearly inferior choices may come from including only supply considerations in investment choices. For the second policy, it is demonstrated mathematically that refraining from discounting benefits while discounting costs causes a bias towards selection of plans that take longer to build, are delayed in their implantation, or a combination of the two.

The Utah Department of Transportation developed life-cycle benefit-cost analysis spreadsheets that allow engineers and analysts to evaluate multiple safety countermeasures. The spreadsheets have included the functionality to evaluate a roadway based on the 11 facility types from the Highway Safety Manual (HSM) with the use of crash severity distributions. The HSM suggests that local agencies develop crash severity distributions based on their local crash data. The Department of Civil and Environmental Engineering at Brigham Young University worked with the Statistics Department to develop crash severity distributions for the facility types from the HSM.The primary objective of this research was to utilize available roadway characteristic and crash data to develop crash severity distributions for the 11 facility types in the HSM. These objectives were accomplished by segmenting the roadway data based on homogeneity and developing statistical models to determine the distributions. Due to insufficient data, the facility types of freeway speed change lanes and freeway ramps were excluded from the scope of this research. In order to accommodate more roadways within the research, the facility type definitions were expanded to include more through lanes.The statistical models that were developed for this research include multivariate regression, frequentist binomial regression, frequentist multinomial, and Bayesian multinomial regression models. A cross-validation study was conducted to determine the models that best described the data. Bayesian Information Criterion, Deviance Information Criterion, and Root-Mean-Square Error values were compared to conduct the comparison. Based on the cross-validation study, it was determined that the Bayesian multinomial regression model is the most effective model to describe the crash severity distributions for the nine facility types evaluated.

In the Philippines, about 38 per cent of the total population resides in rural areas where poverty remains a significant problem, especially in remote upland communities. Soil erosion has been a well-recognised problem in these areas, resulting in a number of impacts on the livelihoods of the rural poor. The development and dissemination of soil and water resource conservation (SWC) techniques has been seen as essential to achieving improved and lasting outcomes for the livelihoods of upland communities, with benefits spilling over beyond the farm boundary. The participatory development of a cost-effective means of controlling soil erosion, natural vegetative strips (NVS), has increased the adoptability of SWC for many upland households, enabling them to incorporate agroforestry and other practices in their farming systems. The Landcare Program in the southern Philippines has facilitated the adoption of these practices over the past decade. However, the impacts of adoption on the livelihoods of farming households, and the externalities that adoption may deliver, have remained speculative. This thesis first explores whether the adoption of Landcare practices has resulted in improved livelihood outcomes for upland farming families. Second, it analyses the potential for the piecemeal adoption of these measures to deliver tangible benefits at the watershed scale. Finally, using a benefit-cost approach, these outcomes are compared to the costs of the research and extension projects that have helped achieve them. The analysis is carried out in two upland municipalities, San Isidro and Pilar, in the Province of Bohol. Landcare households in Bohol dedicate a large percentage of household resources to the production of rainfed rice, which is the primary source of subsistence for adopting households while upland plots play a secondary role. The adoption of NVS alone did not typically generate significant economic benefits, yet created the stable platform on which more commercial investments were being made, especially through NVS enrichment. In San Isidro, the average annual income of adopters generated from upland activities was estimated to be more than double that of non-adopters, with a difference of over PHP 7,500. In Pilar, the net impacts of adoption were estimated to be only around PHP 3,700, given that many households had not enriched their NVS at the time of the survey. At the household level, the benefits of adoption are therefore contingent on the ability of the household to make further investments in their farming system, stemming from improved soil stability. Several case studies were used to describe the process of and constraints to farm development. The average impacts on incomes were found to be significant at the household level, with the potential to lift a household above the poverty threshold. Yet the marginal nature of the upland farming systems limits the aggregate on-site benefits. The expansion of activities into Pilar and Alicia was estimated to increase the net annual benefits, reaching PHP 2,270,000 (around AUD 60,000) per year by 2009. In absolute terms, this impact is still quite modest, but needs to be considered together with the off-site impacts and the costs of the Landcare Program. In Pilar, one of the clearest impacts of erosion due (in part) to upland cropping has been the sedimentation of the Malinao Dam. The significance and distribution of forgone revenue from irrigated rice as a result of sedimentation is largely determined by factors including the timing of rainfall events, the allocation of water between users, and the value of alternative land uses. Furthermore, the upland agricultural landscapes of Bohol are diverse and complex, with numerous sources and filters of sediment. A terrain analysis model was used to model the impact of incremental adoption of Landcare practices within the landscape. The results show that the spatial distribution of adoption is likely to be as important as the extent of adoption when it comes to delivering off-site benefits. The aggregate level of losses avoided as a result of Landcare was estimated to be around PHP 1,023,000 (AUD 26,900) over a 20-year period at a discount rate of five per cent. The results of the livelihood analysis and watershed modelling were combined in a benefit-cost analysis (BCA) and compared to the costs of the projects and other investments that have helped bring about the impacts. The results showed a positive but small NPV of around PHP 3.5 million, equating to around AUD 91,000, for the 20 year period simulated, using a 5 per cent discount rate. The sunk costs of the early phases of theLandcare Program, however, continue to provide the basis for ongoing livelihood projects that utilise farmer groups as a means of extension. Furthermore, when the expansion of the Program into other nearby municipalities can draw on the original research or learning hub, rapid adoption can be achieved at relatively low cost and provide a significant return on investment. Overall, the evidence presented indicates that the net economic impacts of the Landcare Program in Bohol are positive, even when taking into account the prior investment in research and training. The major beneficiaries of the Program are the individual households who adopt the conservation farming practices, with these benefits largely generated by the farming opportunities stemming from improved soil stability. The diversification and commercialisation of the upland component of the farming system has mainly utilised land and labour at low opportunity cost, though limited access to these resources prevents some households from proceeding along the identified farm development pathway. The focus on livelihood development does not deny the seriousness of downstream watershed problems arising from upland agriculture. However, it is agued that given the relativity of on-site and off-site benefits, the focus and primary justification of the Landcare Program should remain on improving the productivity and livelihoods of upland farmers through facilitated, farmer-led, group-based research and extension, with these downstream impacts being seen as side benefits of what is essentially a livelihoods program.

Collaborative project delivery methods are believed to contribute to faster completions times, lower overall project costs and higher quality. Contracts are expected to influence the degree of collaboration on a given project since they allow or restrict certain lines of communication in the decision making process. Various delivery systems rank differently on the spectrum of collaboration. Because collaborative project delivery methods require owners and AEC stakeholders to meet frequently early in the delivery process, they are thought to add additional upfront costs to the project. The purpose of this study is to test if collaborative project delivery methods impart enough value so that the upfront cost incurred at the beginning of project is eventually surpassed by realized savings. Ideally, the extreme forms of project delivery methods, that is, Integrated Project Delivery (IPD) and Design-Bid-Build (DBB), should be compared to test the effects of collaboration on benefits to the owner. Due to difficulty in obtaining data on IPD and similarly scaled DBB projects, for this study, their close cousins, CM-at-Risk (CMR) and Competitive Sealed Proposal (CSP) were compared. The study engaged statistical comparison of cost of change orders and overall project cost performance of 17 CMR and 13 CSP projects of similar scales by same owner. Project cost performance observed under CMR projects was found significantly more than those under CSP. This study is expected to help boost confidence in the benefits of collaborative project delivery methods. It is likely that the results will encourage acceptance of IPD for public projects. Owners who were previously discouraged by the increased upfront cost of collaborative projects may also find interest in the results of this study.

Shihmen Reservoir has contributed to the economic development of northern Taiwan since it was built in 1964. As result of natural disasters and improper development, Shihmen Reservoir had a big problem with sediment deposition. To solve this problem, government executed the first stage of integrated treatments planning on Shihmen Reservoir.The period of program is from 2006 to 2008 and divided into three parts. From the government point of view, this study recognized the use of agriculture water¡Nindustrial water¡Ndomestic water¡Nelectricity generation¡Ntourism and decreased sediment extraction expense as benefit index ¡F recognized budgets and natural disasters as cost index to evaluate the effect of this program.The value of benefit-cost ratio before integrated treatments is 2.817 and the value of benefit-cost ratio after integrated treatments is 3.566. The value of benefit-cost ratio after integrated treatments is bigger than the value of benefit-cost ratio before integrated treatments.It means that it is workable for this program. Considering the reason that the water rate and utility bills are much cheaper in Taiwan, this study adjust the rate of water and utility individually. With the adjustment of water rate, the value of benefit-cost ratio before integrated treatments is 3.519 and the value of benefit-cost ratio after integrated treatments is 4.31. With the adjustment of utility rate, the value of benefit-cost ratio before integrated treatments is 3.689 and the value of benefit-cost ratio after integrated treatments is 4.074. It is also beneficial for this program.