Indiana. Dept. of Transportation

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Economic analysis is a critical component of a comprehensive project or program evaluation methodology that considers all key

quantitative and qualitative impacts of highway investments. It allows highway agencies to identify, quantify, and value the economic

benefits and costs of highway projects and programs over a multiyear timeframe. This research was conducted to provide the Indiana

Department of Transportation (INDOT) with a uniform economic analysis methodology. The developed economic evaluation model

applies the methodology of life‐cycle benefit cost analysis to perform economic analysis for proposed highway projects. As a result of

thisresearch, an Excel based computer program,the Indiana Highway Economic Evaluation Model (IHEEM), was developed to provide a

convenient tool for INDOT personnel to implement the method. The main costs and benefits contained in the model are agency costs

and user benefits. Agency costsinclude initial costs, routine maintenance costs, rehabilitation costs, and remaining value of the facility.

User benefits contain travel time savings, vehicle operating cost savings, and crash reduction savings. In addition to the deterministic

method for cost and benefit analysis, an alternative probabilistic approach was also developed and incorporated into IHEEM so that the

outputs can be expressed asranges of values with likelihoods of occurrence.

US Transportation Collection

SPR-3429