Optimizing Economic Return on Highway Investment

by Robert L. Carstens, (F.ASCE), Prof.; Dept. of Civ. Engrg., Iowa State Univ., Ames, Iowa,

Serial Information: Transportation Engineering Journal of ASCE, 1976, Vol. 102, Issue 4, Pg. 665-672

Document Type: Journal Paper


Methodology currently in use for economic analysis of highways does not readily lend itself to formulation of an optimal program. Benefit/cost ratios or rates of return are meaningful only in comparison with a specific mutually exclusive alternative. Use of the net present value method and dynamic programming permits selection of the combination of projects and alternatives that will provide the maximum economic benefit, given a limitation on the amount of investment capital. This method also permits an analyst to identify that level of total investment for highways beyond which marginal returns tend to diminish.

Subject Headings: Economic factors | Highways and roads | Investments | Permits | Comparative studies | Value engineering | Computer programming | Assets

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