A model for life cycle evaluation of highway investments

Abstract

Sustainable development has added a new dimension to the evaluation of highway capacity investments. It places an emphasis on analyzing the entire life of a facility, from an environmental as well as an economic perspective. This paper presents a way to analyze capacity investments that is consistent with the sustainable development perspective. It departs from the typical approach of focusing on a small set of peak use conditions, often in the design year. It couples economic concepts with a representation of the facility's lifetime use to perform a robust analysis. A freeway facility is used to illustrate the ideas. Principles of engineering economics and life cycle costing help determine what incremental capacity investments would be warranted given postulated or observed use patterns. It is then demonstrated that the findings from this analysis and the principles employed can be applied to a wide range of infrastructure investment decision making situations.

Keywords:

• Life cycle
• Infrastructure
• Economics

Acknowledgements

The author would like to acknowledge the invaluable contributions of Stacy Eisenman and Nathan Higgins in carrying out the comprehensive numerical analyses that predate the ideas presented here. Without their help, the insights presented here would not have emerged.