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The above benefits were estimated for each of SECTION 5 SENSITIVITY ANALYSIS OF 20 years that the BRT project is expected to be in oper- COST/BENEFIT RATIO ation. The results of the analysis show that under our base case assumptions, converting an arterial This section describes the results of a sensitivity lane to a BRT lane is likely to show a favorable cost/ analysis to show the effects of different assumptions benefit ratio or a positive NPV, because the net ben- for the following four key variables: efits exceed the total costs of providing the BRT Pre-project auto-transit mode share, system. However, the results are highly sensitive to Corridor length, the assumptions for pre-project traffic volume and Discount rate, and mode share, as well as the travel time and frequency BRT speed improvement. improvements provided by the BRT system. Table 9 shows the results for four values of daily Figure 1 shows the effect of pre-project mode person throughput, ranging from 20,000 to 50,000. share on the resulting cost/benefit ratio for four lev- These results illustrate that while the project shows els of daily person throughput. All other variables are a positive net benefit at 40,000 daily person through- unchanged from the scenario presented in Section 4. put, the net benefits become negative at lower and The solid line with diamonds is the base case scenario higher volumes. presented in Section 4. The dotted line with squares shows that a higher At lower volumes (20,000 and 30,000), the pre-project transit mode share (20%) leads to a favor- number of transit riders is too low to generate able cost/benefit ratio for values of person throughput sufficient travel time benefits to offset the proj- greater than 25,000. At very high levels of through- ect costs and the (small) travel time disbenefit put (50,000 and more), the number of transit riders experienced by auto drivers. in the No Build alternative is too large to be served At a daily throughput of 50,000 persons, the under our assumption of 60-foot articulated buses travel time benefit to transit riders is large, but with 10 minute headways. the automobile volume is large enough that The dashed line with triangles shows that a lower going from three mixed lanes to two results pre-project transit mode share (10%) always results in a significant drop in automobile speed. The in a cost/benefit ratio less than one. In these cases, value of the travel time disbenefit experienced the number of transit riders is too small to generate by auto drivers is nearly equivalent to the value travel time benefits sufficient to offset the project of the benefit to transit riders. Thus, the net ben- costs and the (small) travel time disbenefit experi- efits are significantly less than project costs. enced by auto drivers. The next section presents a sensitivity analysis Figure 2 shows that the cost/benefit ratio is fairly to better understand the effect of key variables on constant in relation to corridor length. These calcu- cost/benefit analysis results. lations assume that all auto and transit users travel the Table 9 Base case results for different values of passenger throughput. Key Assumptions: Discount rate = 7% BRT Speed = 11 mph; No Build Bus Speed = 7 mph BRT Headway = 6 min; No Build Bus Headway = 10 min Pre-Project Mode Share: Auto = 85%; Transit = 15% Peak-Hour Peak- Peak-Hour Peak- Direction Auto Volume Direction Transit Riders Daily Person BRT BRT NPV of Net B/C Throughput No Build Project No Build Project Benefits (million) Ratio 20,000 850 772 180 273 -$13.7 0.6 30,000 1,275 1,159 270 410 -$3.3 0.9 40,000 1,700 1,545 360 546 $2.4 1.1 50,000 2,125 1,931 450 683 -$11.6 0.7 12

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Auto-Transit Mode Share before BRT 85%-15% 80%-20% 90%-10% 1.8 1.6 1.4 Benefit/Cost Ratio 1.2 1.0 0.8 0.6 0.4 0.2 0.0 20,000 30,000 40,000 50,000 Daily Person Throughput Figure 1 Sensitivity analysis for values of pre-project auto-transit mode share. full length of the corridor, and all other variables are that, with a 3% discount rate, the hypothetical BRT unchanged from the scenario presented in Section 4. project would achieve a positive net benefit if the Most of the costs and benefits are directly proportional daily person throughput is 30,000, 40,000, or 50,000. to the corridor length, so the ratio does not change sig- Table 11 shows results for alternative values of nificantly. The disbenefit of transit wait time does not BRT average speed. The base case analysis presented vary with corridor length, and its contribution to the in Section 4 assumed a BRT speed of 11 mph, which total net benefit diminishes with trip length. This leads results in a 36% reduction in transit travel time com- to a slight increase in the cost/benefit ratio for longer pared to the No Build alternative (with a bus speed trips. At a corridor length of 17 miles, the cost/benefit of 7 mph). ratio is 1.22. If the BRT average speed was only 9 mph, result- Table 10 shows the results using a discount rate ing in a 22% transit travel time reduction, total costs of 3% compared to 7%. Because most of the costs exceed total benefits for all values of throughput occur in the first 2 years while the benefits are spread (Cost/Benefit ratio is always less than 1.0). If the BRT over the subsequent 20 years, a lower discount rate average speed were 13 mph, resulting in a 46% tran- has the effect of maintaining higher benefits relative sit travel time reduction, the project produces positive to costs. Holding all other variables unchanged from net benefits for a range of throughput values (30,000 the scenario presented in Section 4, these results show to 50,000). 1.4 1.2 Benefit/Cost Ratio 1 0.8 0.6 0.4 0.2 0 5 8 11 14 17 BRT Corridor Length (miles) Figure 2 Sensitivity analysis for values of corridor length. 13