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Benefit-Cost Analysis 59 4.1 Benefit-Cost Analysis Approach As noted in the previous section, a B-C analysis would have allowed for the assessment of the relative importance of different types of benefits for any given scenario/alternative for truck-only lane application. It also would have allowed for a determination of which configurations appear to deliver the highest level of net benefits after taking costs into account. This is particularly important when comparing LCV versus non-LCV operations on truck-only lanes since costs may be higher for LCV systems off-setting some of the productivity benefits. Yet, most of the studies reviewed for the performance evaluation task did little to assess the cost-effectiveness of truck-only lanes compared to other alternatives (such as additional mixed-flow lanes) based on the development of B-C ratios. Due to this constraint, alternative approaches were developed for the B-C analysis in this study. The approach that was taken in this study was to define a representative baseline (generic) cor- ridor for each of the two scenarios/corridor types (long-haul intercity and urban), to apply the approaches and data provided by the previously reviewed studies, use standard values from the literature to monetize benefits, and use data from the prior studies to estimate costs. The B-C analysis was based on a net present value (NPV) analysis approach, which is described below. 4.1.1 Net Present Value Analysis The B-C analysis was based on an NPV analysis approach using a base year of 2008 and a time horizon of 2030 for the analysis. Monetized benefits and costs were estimated for each year in the 2008 through 2030 time period and discounted to the base year (2008) to get the NPV of B-C ratios for each alternative. Benefits were calculated for a similar set of performance measures as those evaluated in the reviewed studies. The benefits were monetized using monetary values for travel times and reliability (using auto and truck value of time estimates) and monetary val- ues for accidents (by type of accident). Costs were calculated based on unit cost factors devel- oped from the literature (a detailed discussion of the benefit monetization factors and unit costs is presented in Appendix C, which is available on the TRB website at www.TRB.org by search- ing for NCHRP Report 649/NCFRP Report 3, and summarized later in this chapter). A later sec- tion describes the traffic growth and other economic assumptions used for the NPV analysis. As described earlier, representative baseline corridors were defined for the B-C analysis, so that the relative benefits-costs of truck-only lanes in different corridor applications could be eval- uated. The following section describes the corridor concepts defined for the B-C analysis. 4.1.2 Representative Baseline Corridors The representative baseline corridors defined for the B-C analysis are not actual corridors but are generic corridors, that provided us with the opportunity to control characteristics of the cor- ridors for analysis purposes. Although not actual corridors, the characteristics (e.g., auto and truck traffic volumes, length of corridor, and number of lanes) are derived from actual corridors evaluated for truck-only lanes throughout the country. Readers should view the B-C ratios calcu- lated with this approach with some caution as they are not based on detailed analysis using data from actual corridors. However, for comparative purposes, and to give an idea of the range of assump- tions that would make truck-only lanes a preferred alternative, the approach is useful. For each baseline corridor scenario (long-haul and urban), a set of general corridor and traffic characteristics were defined. These characteristics included the following: Length of corridor, Number of lanes and capacity, and Total average daily traffic (ADT) and heavy-truck ADT.

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60 Separation of Vehicles--CMV-Only Lanes For each baseline corridor scenario, a set of meaningful alternatives was defined including a truck-only lane alternative (which included two operational scenarios--with and without LCVs-- in the case of a long-haul corridor), a mixed-flow lane alternative (to assess the relative benefits and costs of truck-only lanes compared to additional mixed-flow lanes), and a no-build alternative. Subsequent sections provide a more detailed description of the alternatives considered within each corridor scenario. Because the data inputs for the B-C analysis for the urban and long-haul corridor scenarios have a high degree of uncertainty associated with them (such as costs and factors impacting truck diversion rates), and the magnitude of this uncertainty is unknown, the study team felt uncom- fortable computing a single B-C ratio for each alternative. In order to recognize uncertainty in key input variables, a sensitivity analysis approach was used for the B-C analysis, which is described below. 4.1.3 Sensitivity Analysis Approach To capture some of the uncertainties involved in the range of factors driving the diversion of truck traffic to truck-only lanes (which have a direct impact on the performance benefits estimates of truck lanes), as well as the uncertainties in capturing the range of costs for truck-only lane proj- ects, a sensitivity analysis approach was used for the B-C analysis. A key variable in the analysis is the assumption about how much truck traffic diverts to the truck-only lanes. In the case of truck- only lanes without LCV operations, diversion rates should be a function of the relative congestion conditions on the mixed-flow lanes (assuming trucks are not required to operate on the truck-only lanes), number and placement of the exits and entrances to the truck-only lanes (and an associated cost tradeoff), and the O-D patterns of the trucks. In the case of truck-only lanes with LCV oper- ations, diversion rates are expected to be a function of the connectivity to a larger LCV network, commodities carried (not all commodities will benefit from LCV operations), O-D patterns of the trucks, and off-system infrastructure availability (staging areas) and costs of LCV operations. None of the performance evaluations of LCV operations described in the previous chapter have con- ducted this type of thorough evaluation of the LCV market opportunities and they have tended to assume very high levels of trucks diverting to LCVs. However, analysis conducted for the I-15 Com- prehensive Corridor Study in Southern California and analysis underway at the time of this study of potential LCV operations in the I-80/90 corridor between Chicago and Boston conducted for FHWA suggest that the markets for LCV operations in real corridors might be considerably smaller than previous studies have assumed. Therefore, the sensitivity analysis involved consider- ing a range of diversion rates and assessing the impact of diversion rates on B-C ratios. The sensi- tivity analysis also considers the uncertainty in cost estimates and varies these in order to take into account potentially missing cost elements or certain widely varying unit cost factors reported in the literature. For long-haul corridors, the sensitivity analyses included the following: Variations in rates of diversion to LCV lanes and truck-only lanes without LCVs, and Variations in costs. For urban corridors the sensitivity analyses included the following: Variations in rates of diversion to truck-only lanes, and Variations in costs. The sensitivity analysis approach for the B-C analysis of truck-only lanes along long-haul and urban corridors is useful in gaining the following key insights: Assessing the range of diversion rates that would result in truck-only lanes being cost-effective in comparison to adding mixed-flow capacity;