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May 20, 2004
VIRGINIA POSTREL looks at diminishing returns for highway spending.
To which I'd add that I often wonder how long it takes for the time saved by improved highways to make up for the time lost due to delays during the construction phase, especially if you discount to present value.
UPDATE: Via email from Bill Hobbs, an answer to my question:
A new report finds that motorists can lose more time in road construction delays than they will save in years of driving on the newly "improved" road. The national report, Road Work Ahead: Is Construction Worth the Wait? by the Surface Transportation Policy Project, is being released Thursday and uses case studies to examine whether road expansion projects are ultimately worth the wait for drivers.
The study found that construction delays can be so long, and the time savings from the expanded road so small, that it can take years for commuters to break even. In the case of the Springfield Interchange reconstruction outside of Washington DC, commuters are projected to never make up the time that they will lose during the eight years of construction. Drivers now sitting through the construction of I-15 in Salt Lake City are not expected to break even on their time investment until 2010, eight years after the project is completed.
This makes sense to me. More here.
ANOTHER UPDATE: On the other hand, here's a further perspective:
I agree that we should consider time lost due to construction in the cost benefit analysis of highways. There are a couple of other things to consider as well. First and foremost, a highway bill is a jobs bill. $300 billion being spent on highways puts a lot of people to work. Don't forget to include the multiplier effect. In addition, the reduced cost of maintenance on a vehicle saves every person who drives a considerable sum each year. Those reduced costs, along with reduced fuel costs (in cases of new highways) are also realized in either higher profits or lower costs for any product shipped by truck in the US.
There was a study out about a year ago, (sorry, I couldn't find a link) that showed the increased cost of vehicle maintenance for Missouri residents compared to Kansas residents. As a Kansas City native, it is obvious that Kansas spends considerably more on roads than Missouri does. Anyway, the study had a range of $500 to $2000 per year in lower maintenance costs for Kansas residents.
Chief of Staff
Kansas House Majority Leader
I'd like to see more analysis of these factors. I find the "jobs bill" bit unpersuasive, though, as I suspect that the same amount of money, left in taxpayer pockets, would actually create more jobs. They'd just be jobs that elected officials couldn't take credit for. . . .