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Measuring International Trade on U.S. Highways
it is not possible to assess how accurate estimates of international trade traffic must be. If, for example, the central purpose of the formula is to compensate states for wear and tear on their highway infrastructure, then even highly precise measures of value-miles will bear little relationship to the objective of the formula, and ton-miles will only roughly reflect the goal of the formula. Less accuracy is needed if the purpose of the formula is insensitive to variations in ton-miles than if the formula is highly sensitive.
More generally, the accuracy that is needed for formula allocation may depend on whether the objective is constructing, maintaining, and operating infrastructure; reducing congestion; minimizing the impact of the highways on the environment; improving the safety of the network; or any of a number of other worthwhile objectives. When evaluating the quality and reliability of data, such factors as error, bias, and transparency would be weighed differently, depending on the objective of the apportionment formula.
It is instructive to compare the quality of international trade traffic data with that of the data used in existing federal highway apportionment formulas. Each major federal highway program has a legislated formula that relies on data obtained from the joint Federal Highway Administration Highway Performance Monitoring System. The primary measures used in the current allocation formulas include lane miles, vehicle miles traveled, diesel fuel data, state population, urbanized area population, and nonhighway recreational fuel use. Each of these data elements has its own error measures, as well as an established validation procedure that is documented in guidelines that were carefully developed in a federal-state cooperative venture.
It is important to note that each of the data elements used in the existing formulas is directly and independently measured. The measures are also transparent: their sources are well known, and they use carefully monitored procedures for verification. The current formula allocation factors do not rely on model-based estimation procedures; each has a directly measurable error structure in which bias and variance can be specified.
The characteristics of verifiability and transparency are extremely important for estimates used as allocation factors. Unfortunately, the estimates computed in the BTS report are neither verifiable nor transparent.
The BTS model-based estimates of ton-miles and value-miles of inter-