Benefit-Cost Analysis for Transportation Planning and Public Policy: Towards Multimodal Demand Modeling

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Benefit-Cost Analysis for Transportation Planning and Public Policy: Towards Multimodal Demand Modeling


This report examines existing methods of benefit-cost analysis (BCA) in two areas, transportation policy and transportation planning, and suggests ways of modifying these methods to account for travel within a multimodal system. Although the planning and policy contexts differ substantially, this report shows how important multimodal impacts can be incorporated into both by using basic econometric techniques and even simpler rule-of-thumb methods. Case studies in transportation planning focus on the California Department of Transportation (Caltrans), but benchmark California’s competencies by exploring methods used by other states and local governments. The report concludes with a list and discussion of recommendations for improving transportation planning models and methods. These will have immediate use to decision makers at Caltrans and other state DOTs as they consider directions for developing new planning capabilities. This project also identifies areas, and lays groundwork, for future research. Finally, by fitting the planning models into the broader context of transportation policy, this report will serve as a resource for students and others who wish to better understand BCA and its use in practice.



Matthew J. Holian is an Associate Professor at San Jose State University in the Economics Department. He is also a research associate at MTI and he currently teaches Introduction to Transportation Funding and Finance in the Transportation Management Masters degree program, which is supported by MTI at SJSU. He completed his PhD in Economics in 2008 at the Ohio State University, and his recent scholarly publications have appeared in journals such as Journal of the Association of Environmental and Resource Economists and Ecological Economics.


Ralph B. McLaughlin is Chief Economist for the online real estate marketplace Trulia. He leads Trulia's housing economics research team and provides house hunters with key insights about the economy, housing trends, and public policy. His educational background includes a BS in Regional Development from the University of Arizona and a PhD in Planning, Policy, and Design from the University of California at Irvine (with a specialization in Urban Economics). He has more than a dozen publications and research papers in the fields of housing economics, land use and housing policy, and industrial geography, and was previously Assistant Professor and director of the Certificate in Real Estate Development program at San Jose State University.

August 2016
Benefit-cost analysis
Travel demand
Multimodal system



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