Using Cost Benefit Analysis (CBA) has become commonplace for nearly every large scale investment across North America, and now cities, regions and transit agencies are increasingly looking to apply the same principles for smaller scale investments.
Monetizing other benefits with Stated Preference Techniques
Within a ‘typical’ CBA, journey time savings are traditionally monetized by applying a value to time and can form the bulk of a project’s benefits.
However, it is possible to quantify and monetize other impacts that may otherwise be grouped together as ‘qualitative criteria’ such as walkability, urban realm/urban design improvements or perceived safety.
Stated Preference (SP) is a market research technique that is becoming more commonly used in transportation research, where respondents are asked to make a series of choices between pairs of options. These options describe the varying features of an investment at different cost/fare levels. The descriptions are carefully designed so that, using statistical modeling techniques, it is possible to relate the choices made to the services or facilities offered and the costs.
Using this information it is then possible to derive how much extra people would be willing to pay for each of the improvements. This ‘willingness-to-pay’ measure makes it possible to quantify benefits and undertake CBA for most types of investments, regardless of scale.
Prioritization of small scale investments
Armed with information on how people benefit from different types of small scale investments, a systematic process can be applied to prioritize a wide range of investments that previously would have been hard to compare or justify to funding agencies.
Project Examples
CBA of small scale investments
Steer Davies Gleave has experience in undertaking CBA for a full range of transportation measures, including urban realm improvements, wayfinding strategies, TDM investments and measures, revitalization of town centers, bike sharing programs and the UK’s ‘bikeability’ bicycle training program. A number of project examples are highlighted below:
Wayfinding Strategy, Toronto, Canada
We developed the CBA for a range of wayfinding alternatives and produced an outline business case of the pedestrian wayfinding strategy in Toronto. Analysis was based on behavioral change assumptions we had made on a separate wayfinding monitoring project in London, UK.
Expo Line Upgrade, Vancouver, Canada
SDG successfully monetized the benefits of several initiatives on the SkyTrain system, ease of circulation, various station facilities, security and safety. While the analysis was packaged into a full capacity upgrade strategy, each component could be evaluated separately and applied to other rapid transit projects in the region.
Travel Behavior Change, Manchester, UK
We pioneered the first CBA for a ‘smarter choices’ investment package as part of Manchester’s Travel Behavior Change Strategy. The package included TDM measures as well as walking and cycling elements.