Demand Elasticity and Benefit Measurement in a Waterway Simulation Model

Waterway simulation models can be used to evaluate system performance and optimize investment and operation decisions, provided the effects of such decisions on demand are properly considered. Some simulation models have considered demand changes due to seasonal variations, economic growth, congestion effects on travel times, and user responses to service interruptions—but not all of these factors together. An elastic demand relationship embedded in a simulation model is used to estimate the effects of changing service times and lock closures during the simulation. Because traffic demand and benefits may be significantly affected by the simulated decisions, evaluation or optimization of the system merely on the basis of total costs is unreasonable. Estimation of the benefits to waterway users also is demonstrated during simulation runs while accounting for the users' responses to lock closures and other factors that affect travel times. Specifically, the present worth of net benefits for the entire analysis period can be computed and used as the objective function for optimization. This approach can account for infrastructure construction and maintenance costs, the effects of service quality and interruptions on user costs, and possible mode shifts in response to waterway service quality.