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The Policy Decision

Computer modeling can and does help examine possible improvements and additions to the transportation system but by itself cannot make any decision. How is the actual decision about policy reached?

One technical aid to decision making is benefit-cost analysis. This is a process of systematically enumerating the benefits and costs of a particular option, say, a new link in the road network or an extension of a transit line, and assigning to them monetary values. The ratio of benefits to costs can then be calculated. Where many projects are competing for limited funds, the benefit-cost ratios may be used as a means of deciding which ones to fund.

On the benefit side of a proposed improvement might be listed time saved by travelers. Doing this means that a monetary value must be assigned to time, and in fact, a large number of studies have been done by transportation analysts to find out how travelers value their time. Other benefits might include lives saved and injuries avoided if the new route is safer than the old one. Savings in vehicle-operating costs would be considered if the new route were shorter or reduced stop-and-go traffic. Costs would include land acquisition costs, construction costs, and repair costs, among others. Typically, the three biggest items in highway benefit-cost studies are construction and land costs, time savings, and vehicle-operating costs.

Benefit-cost analysis has its subjective side. For example, how does one assign precise values to human life and health? Measures such as estimated lifetime earnings and the awards of courts in negligence cases have been used. The favored technique at the present time is a statistical one that combines information on wage rates and fatality rates in different occupations to determine how much more people demand to be paid in order to accept a certain amount of risk of loss of life.12 For example, if a person would accept a death risk of one chance in 1,000 for a wage difference of $1,000, then one might say that implicitly the person places a value of $1,000,000 on his or her own life. This method may seem to be cold-blooded or even a bit bizarre, but if we are going to make expenditures to reduce the risk of death or injury, there is no way to get around placing a monetary value on life, even though we all concede that no one really has that kind of godlike wisdom. There are also many other items that cannot readily be converted into dollar terms. For example, urban design and aesthetic issues do not lend themselves well to being "monetized." Nonetheless, benefit- cost analysis is far superior to reliance on pure intuition.

Transportation questions often generate citizen involvement and can become highly emotional and political. New construction takes people's property and can have a great impact on neighborhoods. A freeway through a neighborhood can be a formidable barrier between the remaining halves, greatly raise the noise level, lower the air quality, and generally make life there a great deal less attractive. Changes in the flow of traffic may bring windfalls to some businesses and large losses to others. Citizens whose daily travel, particularly the commute to work, is slow and frustrating constitute a powerful force for public investment in new roads and, in more densely developed areas, for public transportation as well.

Some citizens' disillusionment with highway building has come from what planners and engineers refer to as "induced demand." When the capacity of the road network is increased (for example, by the opening of a new expressway), it is often observed that traffic congestion does not fall very much on the other roads and that in the peak hours the new road may be operating at close to maximum capacity in a very short period of time. The building of new capacity has induced additional traffic; also, some people who previously traveled during off-peak hours because of congestion now travel during peak hours. The highway planner may be satisfied with the result in that more people are now getting what they want, namely the ability to travel where they want when they want. But to the citizen who used to drive to work in the morning rush in one hour and now drives in 59 minutes, it may appear that little has been gained.13 The next time a highway bond issue comes up for referendum, he or she is likely to vote no.

Citizens' opposition to highway building has become formidable. In San Francisco in the early 1970s, the Embarcadero Freeway was halted in mid-construction by opposition, based largely on concerns that this elevated road would block views of San Francisco Bay. When the portion that had been built and was in use was damaged in the October 1989 earthquake, the city did not move to rebuild it. Rather, the remaining portions were torn down. Since then, the north and south portions have been replaced by an at-grade road. In the 1970s New York City planned Westway, a highway along the west side of Manhattan to divert through traffic from the city's congested street system. The project had the support of the Mayor, the

Governor, organized labor, planners, and probably the majority of the city's population. However, it was opposed for over a decade by a determined group of citizens who simply did not want any more highways. In 1985, after $200 million had been spent on land acquisition and design costs, the city conceded defeat and filed an application with the federal Department of Transportation (DOT) to have some of the funds that would have been spent on Westway switched to mass transportation projects. The term freeway revolt has been used to describe rising resistance to highway building. Not only does resistance come from affected residents, businesspeople, and property owners, but some also comes from environmentalists, who in general do not favor anything that will increase automobile use.

A variety of business interests may weigh heavily in the decisions about highway construction. Firms wanting the better access that a new highway would bring may lobby for it. Major property owners who do not want their property bisected by a new highway may make every effort to oppose it. In some cases a new roadway may go through whichever neighborhood or municipality is politically weakest and therefore least able to resist it.

The details of how a new highway or highway improvement will be funded may be critical. A local government may know that on a pure calculation of benefits and costs, alternative A is distinctly superior to alternative B. But if alternative B will be paid for primarily by state and federal funds, whereas alternative A will require a substantial local contribution, the local government is likely to go for alternative B. All projects look more favorable if funded with OPM (other people's money).

Modeling, benefit-cost studies, and other types of analysis can and do help move the decision process in the direction of greater rationality. But the ultimate decision comes out of the political process.

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