Naomi Stein Glen Weisbrod

Economic Development Research Group, Inc.

Online Training Session, March 2015

1. The definition & context for wider economic benefits (W.E.B.)

2. Identifying when wider economic benefits are applicable

3. Measurement of wider economic benefit factors (C11 tools)

4. Walk-through of C11 tools applications

2

3

Submit Questions Using the

Question Pod

4

Category of Effect Trad. BCA

Societal BCA EIA MCA

Construction Effects

User Benefit (Traveler Benefit) –Time, Cost, Safety Model Model Model Model

Externality Effects (beyond just travelers)

• Environmental Benefit – pollution, greenhouse gases

• Social Benefit – livability, quality of life

• Wider Economic Benefit – access, connectivity, reliability C11 C11 w/ Model C11

• Macroeconomic Effects -- indirect (supplier) & induced (respending) multipliers; attraction of labor, capital, trade Model

• Other Social Policy – equity, cumulative impact, inter- generational reservation impacts

BCA Tools: Cal_BC, BCA.net, TREDIS-BCA (all free) EIA Tools: REMI-TranSight, TREDIS-Econ ($ cost) MCA Tools: Spreadsheets (free), Decision Lens ($ cost)

5

6

CBA Multi-Criteria Rating Rating Criteria USDOT OH WI MO KS Efficiency: Travel time, cost, service level X X X X X Safety (accident rate) X X X - X Intermodal access & interchange (x) X T X T Reduce congestion bottlenecks (x) X X X X Connectivity to corridors or gateways (x) - X X T Expanded labor market access (x) - T - T Reliability of travel times (x) - T - T Truck freight route, supply chain impact (x) X T X X Location: revitalize of distressed area - X - X - Land use: supports cluster or in-fill - X - X X Policy: support target industry growth - - - X X Local public support - - X - X Leveraging private investment - X - - - Jobs (support growth) - X X - - GRP or Value Added - - - - X Net Productivity X X* X* - X*

Traveller Benefit W.E.B. Driver of Productivity Local Effects Macro Economic Outcomes

X = included (x) = allowed T= intermediate factor in TREDIS econ model

All of these states feature variants of a spreadsheet style scoring format

7

Multi-Criteria Rating Factors Used by State DOTs

Corresponding Productivity Related Metric

• Freight Productivity (WI) Overall Productivity

• Travel time & cost reduction (OH, WI, NC) • LOS improvement (WI) • User Benefit (WS, KS)

Element: Efficiency

• Volume/Capacity (OH, NC, OR) • Congestion Relief (MO) Element: Reliability

• Promotes Freight Movement (MO, OR) • Promotes Exports from State (WI) Element: Accessibility

• Multi-Modal Impact (OH) • Intermodal Connectivity (MO) • Connections to Network (WI)

Element: Connectivity

• Job Growth (OH, WI) • GDP Growth (NC, KS) Outcome of Productivity

8

TREDIS-ECON accepts all three W.E.B. inputs or offers an alt version of C11 modules REMI-TRANSIGHT can accept reliability metrics; it has an alternative accessibility concept

Standard Traveler Benefit • Travel time • Travel cost • Safety

Wider Transport Benefits • Reliability • Accessibility • Intermodal

Connectivity

Productivity Elements •Trans. Efficiency •Technology •Agglomeration

Economic Impact •Output •GDP •Employment •Wage Income

User Benefit Transportation System Economic Effects

Graphic © 2012, Economic Development Research Group

+ =

9

US: NCHRP 02-24 and SHRP2 – C11 W.E.B. Tools (measures for BCA, EIA or MCA)

UK: Transport Appraisal Guidance , WebTAG (W.E.B. metrics for BCA)

• Commute/Labor Market Access

• Buyer -Supplier Market Access

• Business Reliability Benefits

• Logistics/Supply Chain Benefits

• Intermodal Connectivity: Terminal Access and Connecting Service

• Agglomeration Effect (market access)

• Output in “imperfectly competitive markets” (adder to business $ benefit)

• Labor Market: Gain from workforce participation & more productive jobs

• Govt. tax impact of greater workforce participation and more productive jobs

BCA Tools: Developer notes are available on how to adapt Cal BC and BCA.net TREDIS-BCA can only address these factors with the fee-based version

10

c

Step-by-step walk-through of examples, available on the C11 website

11

12

(A) Little or No Productivity Impact Projects addressing social, environment, safety factors, and personal travel

(B) Productivity Gain from Traditional User Benefit Projects that reduce time cost for business-related travel: speed, vehicle capacity, frequency, dwell time

(C) Productivity Gain from Wider Economic Benefits Enhance reliability for business-related travel: congested bottlenecks, product inventory and delivery processes

Enhance accessibility for business-related travel: labor market, material supplier market, customer market

routes between clusters or communities in a region Enhance intermodal connectivity for business-related travel:

ground access to, or service at, intermodal terminals

W.E.B. Tools NOT

needed

W.E.B. Tools useful

13

14

MassDOT: South Shore Rail to expand job and labor market access Vancouver, BC: Multimodal plan to expand international trade and freight connectivity

1 • Policy / Funding Stage

2 • Planning/Strategy Stage

3 • Programming Stage

4 • Prioritization Stage

5 • Project Devel./ EIS Stage

6 • Operations Stage

Screening Tool (TPICS)

Ref: SHRP2 Collaborative Decision-Making Framework

Economic Model (REMI, TREDIS)

Wider Economic Benefit Tools (C11)

15

16

17

Trade-off of delivery & inventory cost Buffer Time to ensure 95% on-time delivery

Trips (in 000's)

600

500

400

300

200

100

00 8 10 15 16.5 Minutes

StandardDeviation

95th Percentile

FHWA Freight BCA Study SHRP2 C-11 Final Report

Effect on business operations & technology: (a) Deployment of vehicles, drivers, loading dock & stocking workers; (b) Lean inventory and Just-in-Time production technologies

18

Interpretation of how productivity gains occur from agglomeration (access scale)

Urbanization, economies of scale and scope Knowledge spillovers, proximity to R&D

Concept of agglomeration economies as cause for disproportionate concentrations of specific industries at specific locations, enabled by access to wider markets, including: Labor markets: “commuting” Intermediate markets: “supply chains” Product customer markets: “delivery”

19

Intermodal (rail –air-marine ) terminals provide access to broader customer markets, depending on ground access, connecting services (volume, destinations, frequency & speed), and connection dwell time.

20

C11 Tool Key Driver of Impact

Reliability • Changing V/C Ratios (Based on lanes, capacity, and volume data inputs)

• Changing incident frequency and duration (Based on planner estimates from ITS projects)

Market Access • Change in zone-to-zone travel times (based on a significant change in the regional transportation network)

Intermodal Connectivity • Changes in access time to terminals

• In special cases: changes in activity levels at terminals

21

Reliability of Travel Time • Estimating the impact of congestion reduction on reducing

“non-recurring” incident delays that leads to wide variability in travel times.

• Calculate the value of improving predictability and reducing “buffer-time”.

Trips (in 000's)

600

500

400

300

200

100

00 8 10 15 16.5 Minutes

StandardDeviation

95th Percentile

22

Reliability Tool Input

23

Summary View Hourly View

Reliability Tool Output

24

Project Overview

The $1.5 billion I-15 Reconstruction Project involved the rebuilding and widening of a deteriorated, congested 17 mile stretch of Interstate 15, running through Salt Lake City. The project was necessary to accommodate the rapid growth the region was experiencing.

25

Image source: http://www.kiewit.com/projects/transportation/roads/i-15-corridor-reconstruction/

Reliability Tool Case Study

26

Select time of day (AM peak, Midday, PM peak, all day)

Interstate widening to expand capacity

Reliability Case Study : Inputs

Reliability Inputs Base Build

Time Horizon (# years) 5 5

Analysis Period 6am-7pm 6am – 7pm

Highway Type Freeway Freeway

Number of Lanes (one-way) 3 5

Free Flow Speed 65 65

AADT 174,341 174,341

Annual Traffic Growth Rate 1.36% 1.36%

% Trucks in traffic 9.1% 9.1%

Peak Capacity (pcphr, one-way) 6,900 11,500

Reduction in Incident Frequency 0% 20%

Reduction in Incident Duration 0% 20%

Impact assessment at two points in time

Improvements in incident management from ITS system

Reliability Tool Case Study: Inputs

Categories of Delay Base hours Project hours Change in veh. hours

Veh. Occp. Rate

Change in Psgr. hours

Value of Time Annual Savings

Passenger Delay 1,009,284 10,874 998,409 1.5 1,497,614 $11.85 $17,746,727

Commercial Delay 96,690 1,088 95,603 1.2 114,724 $26.89 $3,084,915

Recurring Delay 1,105,974 11,962 1,094,012 1,612,338 $20,831,642

Passenger Delay 137,553 29 137,524 1.5 206,286 $11.85 2,444,490

Commercial Delay 18,119 4 18,115 1.2 21,738 $26.89 584,547

Incident Delay 155,672 33 155,639 228,025 $3,029,037

Use estimates of incident delay hours saved to quantify reliability savings

Reliability Tool Case Study: Results

27

Accessibility (Markets)

Estimate the value of improved labor market access Estimate the value of improved truck delivery access Estimate the value of enhanced urban agglomeration

Methodological differences in tools:

Based on defined threshold Based on effective density (decay function)

Effective Density (decay function)

Planning support

Productivity impact assessment

28

Accessibility Tool Input

29

Effective Density can either be used as a performance measure for market access, or as an input to a calculation of productivity impacts in the economy.

Accessibility Tool Output

30

Project Overview

Between 1979 and 1992, 15.9 miles of Interstate 476, known as the Blue Route, was completed between Interstate 76 and Interstate 95.

31

Bucks, PA Montgomery, PA

Chester, PA

Delaware, PA

New Castle, DE

Study region, with population-weighted county centroids

The Blue Route opened up substantial labor markets within the greater Philadelphia region, improving access between Bucks, Montgomery, Delaware, Chester and New Castle Counties.

Blue Route Section Analyzed

Greater Philadelphia Region

Accessibility Case Study

Activity: Population by Zone

Bucks 567,106

Montgomery 700,227

Delaware 549,174

Chester 396,318

New Castle (DE) 464,471

Assessing labor market access, using population data

Accessibility Case Study: Inputs (1)

32

Base Impedance (minutes)

Build Impedance (minutes)

DVRPC Traffic Impact Study (‘94): 53% time savings on the entire length of the corridor

Sketch-level estimates: Based on DVRPC study, estimate travel time improvement on subsections of county-to-county trips that use the Blue Route

(Travel Time, Minutes) Bucks, PA Montgomery, PA Delaware, PA Chester, PA New Castle, DE

Bucks, PA 20.80 44.00 70.60 65.00 96.10

Montgomery, PA 44.00 18.60 44.60 37.00 71.20

Delaware, PA 70.60 44.60 18.00 39.00 32.40

Chester, PA 65.00 37.00 39.00 23.20 42.00

New Castle, DE 96.10 71.20 32.40 42.00 17.50

(Travel Time, Minutes) Bucks, PA Montgomery, PA Delaware, PA Chester, PA New Castle, DE

Bucks, PA 20.80 44.00 57.00 65.00 78.00

Montgomery, PA 44.00 18.60 31.00 37.00 52.00

Delaware, PA 57.00 31.00 11.50 39.00 29.00

Chester, PA 65.00 37.00 39.00 23.20 42.00

New Castle, DE 78.00 52.00 29.00 42.00 17.50

Accessibility Case Study: Inputs (2)

33

NO BUILD BUILD 1994 1994

ZONES EFFECTIVE DENSITY

EFFECTIVE DENSITY

% Change in ED

Per Worker GRP

Zonal EMP Productivity Impact

Bucks, PA 3774 3952 5% $71,749 276,296 $45,733,539 Montgomery, PA 5658 6367 13% $86,002 505,200 $257,230,112 Delaware, PA 5484 10260 87% $77,050 260,547 $638,720,126 Chester, PA 4052 4052 0% $84,425 223,903 $0 New Castle, DE 4696 5245 12% $110,537 293,232 $179,681,816 TOTAL based on entire economy 23664 29876 12%

$1,121 million

TOTAL Based on service sector $673 million

It is necessary to identify the portion of the economy that is sensitive to the type of access improvement analyzed

Accessibility Case Study: Results

34

Connectivity- Intermodal

Image source: FHWA

Estimate the value of enhancing access & connectivity at intermodal centers:

RAIL AIR MARINE

Estimate of benefit based on characteristics and access:

• Volume, value of goods, and origins and destinations served

• Ground access (distance and time)

35

Facility types in database:

1. Marine Port – Freight 2. Airport – Passenger 3. Airport – Cargo 4. Freight Rail Intermodal Terminal 5. Passenger Rail Terminal

Connectivity Tool Input (1)

36

Connectivity Tool Input (2)

Improvement in terminal access

Run the tool with two sets of inputs:

1. Base travel time

2. Improved build case travel time

37

Connectivity Tool Output

Facility Characteristics

National Comparison

Change in Access

38

The Alliance Global Logistics Hub is a multi-modal logistics parks that combines rail, trucking, and air freight facilities.

39

The Logistics Park is part of a 17,000 acre mixed-use, master planned development in the far northwest suburbs of the Dallas-Fort Worth area. Development has surged next to SH-170 which provides improved access to the facility.

Connectivity Case Study

Contacts for rail intermodal facilities to determine Unit Lift Capacity can be found at www.loadmatch.com.

For Rail freight projects, enter in facility information & Unit Lift Capacity

Connectivity Case Study: Inputs (#1)

40

Enter in distance to facility, # of trucks, travel time per truck and fraction of trucks associated with location (if applicable).

Connectivity Input Facility #1

Facility #2

1c. Number of trucks within study area 5,853 5,853 Estimated Speed (mph) 55 55 1d. Travel time (hrs) per truck 0.23 0.17 Default value per truck hour saved $57 $57 Fraction of trucks assoc. with intermodal center 1.0 1.0

Connectivity Case Study: Inputs (#2)

41

Measurement Category Base Project Units Activity 600,000 600,000 Containers Value $32,694 $32,694 Per Container Unique Origins/Destinations 122 122 Orgins/Dest. Facility Connectivity Raw Value 24 24 Index Relative Activity Index Relative Value 7.1% 7.1% Index Relative Origins and Destinations 51.5% 51.5% Index # of trucks associated with facility 5,853 5,853 Trucks Truck hours - facility 1,373 1,022 Hrs Value of time - facility $78,153 $58,160 $ Value Weighted connectivity index 1,870,374 1,391,906 Index

Weighted Connectivity Base 1,870,374 Project 1,391,906 % Improvement 26% Elasticity 0.005 % Change GRP 0.128% County (ies) GRP $86,919,794,000 % of Industry impact 25% GRP Affected $21,593,687,507 Productivity Benefit $27,620,000

Assess improvement for Transportation & Warehousing and Manufacturing sectors that were identified as the primary users of SH-170 to access the rail intermodal center.

Connectivity Case Study: Results

42

Accounting Tool Combining Traditional and Wider Economic Benefits

Benefit ElementNo Build Scenario

Build Scenario

DiffMultiplier

ValueValue of

Total BenefitVehicle-Hours 15,288,500 14,054,600 -1,233,900 $12.00 $14,806,800 Vehicle-Miles 265,812,000 265,812,000 0 $0.64 $0 Safety: Crash reduction (crashes) 710.0 620.0 -90.0 $3,285 $295,650 Benefit for Induced Trips (trips) 0 0 0 $6.00 $0

$15,102,450 Total ----->

Traditional Benefits

Wider Economic Benefits

Benefit ElementNo Build Scenario

Build Scenario

DiffMultiplier

Value

Weighted Connectivity

Index

% Diff

Elasticity Value

% Change in GDP (% Diff x

Elasticity

Value of Total

BenefitCost of Unreliability 2,704,760 2,561,950 -142,810 $9.60 -- -- -- -- $1,370,976 Accessible Employment Base 1,257,747 1,312,552 -- -- -- 4% 0.03% 0.001% $477,213 Effrective Density for Delivery Base -- -- -- -- -- -- -- -- $0 Weighted Connectivity Score 179,595 197,554 -- -- 7% 1% 0.03% 0.000% $78,660

Total -----> $1,926,849

43

1. SHRP2 products supplement and enhance capabilities of existing analysis methods and tools; they are not replacements for them.

2. TPICS provides instructive case examples, the C11 wider economic benefit tools measure factors often left out of evaluations.

3. The W.E.B. tools do NOT capture traditional factors, including traveler time and cost benefits, or economic impacts associated with construction, spending and regional cost competitiveness.

4. Currently, W.E.B. tools do not work for all possible types of projects or situations (e.g., intercity access factors, non-congestion reliability factors or complex intermodal interchange).

5. The W.E.B. tools can generate stand alone performance metrics, or supplement rating, impact or benefit analysis systems. The broader systems provide more complete $ impact numbers.

44

Web Links http://tpics.us/tools/

45

Resource Content of Note

SHRP C11 Report, User’s Guides, and Technical Documentation

• Guidance on tool usage

• Documentation of tool methodologies

NCHRP Report 786 (Project 02-24)

• Guidance on incorporating W.E.B. assessments into planning and evaluation processes

• Step-by-step examples of C11 tool use

• (Separate literature review on theory behind W.E.B.s)

SHRP C32 Report • Step-by-step examples of C11 tool use