Transportation Research Record: Journal of the Transportation Research Board

Value capture refers to the process by which all or a portion of increments in land value attributed to community efforts rather than to landowner actions are recovered by the public sector. As such, it is a form of a public–private partnership. It is widely used across the country and around the world for transit applications; however, its applications to roadways have only recently emerged into discussions of roadway finance, out of motivation stemming from the transportation funding crisis. Two states have legislative provisions for enabling value capture for financing transportation. In Texas, this takes the form of a transportation reinvestment zone (TRZ). This paper presents specifications for a TRZ based on a case study approach and then applies a financial evaluation model based on those specifications to a case study corridor in El Paso, Texas, to assess preliminary revenue sources and cash flows that can be accrued for value capture bonding capacity.

Recent catastrophic events such as floods and earthquakes have underlined the need for rapid infusion of financial and other resources to facilitate repair and reconstruction of damaged facilities and lifeline infrastructure. Because bridge structures are a major component of the essential transportation infrastructure, they require timely application of maintenance and repair. To mitigate risks associated with natural hazards and associated impacts on bridges, it is necessary to adopt suitable financial tools. Hazard-linked securities such as catastrophe (CAT) bonds are financial tools that have called the attention of investors as a risk-mitigating instrument that supports fast recovery of communities and businesses. The benefits of CAT bonds are twofold: the bonds ensure that financial resources are readily available to cover potential losses in the wake of a natural hazard, and they provide attractive returns with risks uncorrelated with other, more traditional financial assets, such as stocks or corporate bonds. This paper presents a model for determining the risk premium (spread) implied by the default-triggering event and structural design parameters. A risk-neutral cost–benefit method for pricing the risk premium (spread) is presented. Examples of conventionally designed and seismically designed bridges illustrate the implication of structural design parameters on the risk premium and the corresponding utility of these structures as potential CAT bond investments.

Many municipal governments are seeking ways to promote the use of public transportation in urban areas through investments in new infrastructure. However, budgetary constraints are often an important obstacle to these undertakings. This paper describes the case in Madrid, Spain, of funding intermodal exchange stations with private capital through the concession approach. It is possible to fund urban transport infrastructure in such a way that private profit and social benefit converge. This paper shows that the construction of intermodal exchange stations in Madrid yields important social benefits to all the stakeholders: commuters save travel time, bus companies diminish their costs of operation, abutters gain in quality of life, and society benefits from a reduction of emissions. Simultaneously, the government is able to promote these infrastructure facilities without spending more of scarce budgetary resources. In recognition of these advantages, this paper makes some suggestions for improving upon the present approach.

Value for money (VfM) assessment has been used by various public agencies worldwide as a tool to compare the viability of pursuing a project as a public–private partnership (PPP) with traditional procurement. Although sources have described the use of VfM in Europe, Australia, and parts of Asia, relatively little is known of the use of such tools in the United States. This paper presents the results of a survey of state transportation agency officials on their PPP practices and their use of assessments and tools to evaluate public–private partnerships. From the evaluation, the paper provides a guided reference for public agencies looking to adopt the VfM methodology in their current PPP decision-making framework. It also provides recommendations for future adaptations to enhance the VfM tool's level of effectiveness.

Many states in the United States have identified the need to invest in major highway corridors to accommodate growth and ensure the state's economy is competitive. With conventional pay-as-you-go approaches to funding and procurement, the necessary projects could take decades to complete and would require additional public funding. One innovative financing alternative that may be used in up to 15 states under the Federal Value Pricing Pilot Program is to employ congestion pricing to generate a revenue stream that can leverage the up-front private capital and thus accelerate the delivery schedule for planned state projects. With variable pricing, tolls on existing limited-access highways could be used to manage growing congestion. Revenues from the tolls could be used to (a) pay for the expansion, reconstruction, or rehabilitation of some or all of these highways; (b) help pay for the construction of new highways; and (c) fund improvements in transit services the demand for which would be stimulated by road congestion pricing. This paper presents a sketch-planning approach to estimate the revenue that could be raised if a state were to implement congestion pricing on some or all of its freeways and, for illustrative purposes, demonstrates this approach with data for a case study state.

Limited space to build new roads, fiscal constraints of federal and state government investment to fund new road construction or add capacity to the existing road infrastructure, and the need to use roads more efficiently have triggered in recent years a trend of looking for alternative ways to address the country's transportation needs. One alternative that has become increasingly accepted by politicians, decision makers, and the public is value pricing. This paper describes the current state of the Dallas, Texas, I-30W value-pricing project. This paper also describes the metrics developed at the beginning of the project to answer key questions related to the implementation of value pricing on I-30W. It presents the findings to date and provides guidance to other transportation agencies on methods to deploy a value-pricing project. Preliminary results for the survey and focus groups about managed lanes and value pricing are presented. The project found that a successful value-pricing project should include early definition of goals, early data collection for performance monitoring, and early development of public outreach.

An important policy instrument for governments to modify travel behavior and manage the increasing travel demand is the introduction of a congestion pricing system. In this study, the influence of a detailed classification of activities is examined to assess likely traveler response to congestion pricing scenarios. Despite the fact that most studies do not differentiate between activity categories, the value of time and in general the space–time properties and constraints of different types of activities vary widely. For this reason, it is of importance to provide sufficient detail and sensitivity in assessing the impact of congestion pricing scenarios. In addition, a first assessment of travelers’ possible multifaceted adaptation patterns is presented. For these purposes, a stated adaptation study was conducted in Flanders, the Dutch-speaking region of Belgium. The experiment was conducted through an interactive stated adaptation survey. In the stated adaptation experiment, respondents could indicate their responses to the congestion pricing scenario. The most prevalent conclusion is that the activity type significantly predetermines the willingness to express a more environment-friendly behavior (i.e., reducing the number of trips, reducing the total distance traveled, switching to more environment-friendly modes). Also, the willingness to show ecological activity-travel behavior (e.g., carpooling and using public transport) in a nonpricing situation is a major differentiator of future behavior in a congestion pricing scenario.

The Oregon Department of Transportation tested a system to collect a vehicle-based mileage fee as a replacement for the Oregon gas tax. Preliminary analysis of the results for that experiment found that access to transit affected people's response to pricing. However, the measure used was a self-reported estimate of distance to “the nearest bus or rail stop that could take you places you want to go.” Since this is not a commonly defined measure, household addresses were used to identify actual distance to transit services in relation to various measures of transit service available. The measures of transit service available were not found to affect people's response to the mileage charges, but actual distance either to any transit or to frequent transit service did have a statistically significant effect on the changes in peak-hour miles in response to the prices. There was also an effect on changes in total miles driven, but it was not statistically significant.

Congestion pricing is a demand management strategy implemented on roadways to reduce traffic congestion, improve mobility, and encourage public transit ridership. The San Francisco County Transportation Authority in California is determining the feasibility of pricing to manage congestion, which is most severe in the downtown, Civic Center, and south of Market districts. These districts serve a variety of purposes that are not limited to office, restaurant, retail, hotel, and industrial and everyday attract a high number of workers and visitors–-both local and tourist. The most vocal opponents to the potential congestion pricing program are downtown merchants. Many believe that their patrons primarily come by car and that drivers spend more money than transit riders and pedestrians. This study examined the travel to San Francisco's major retail and entertainment centers and the spending patterns of those traveling to these centers, to assess whether these perceptions hold true. The survey found that most travelers get to downtown San Francisco by taking transit or walking, regardless of their income. Travelers using these modes spend more per month than those traveling by car, because they come more frequently to engage in recreational activities. The belief that recreational customers predominantly travel by car and spend more than transit riders is not reflected in the data, nor is this belief consistent with similar observations in other cities. Findings indicate the need for faster, more reliable multimodal transportation that supports a vibrant economy and provides viable travel choices to all.

This paper provides a review of truck road user charging mechanisms employed worldwide. The purpose of this study is to identify the variables currently considered in determining user charge rates for heavy trucks within different tolling structures and to examine the relationship of these variables to policy goals.

In this research, interviews and survey data were used to understand better the truckers’ use of toll roads. On the basis of interviews with industry representatives, shipping companies, and drivers, it was clear that owner–operators were the least likely to use toll roads because of the difficulty in passing the cost of the toll on to their customers. Company-owned shipping operations were the most likely to analyze the potential benefits of a toll route carefully and possibly to use that route. A survey of truck drivers in the Austin, Texas, area was conducted both online and by paper. The survey's focus was on the use of State Highway (SH) 130, a tolled bypass route around Austin, versus the use of I-35, which runs through Austin. More than 2,000 respondents indicated their preferred route and whether certain incentives would motivate them to use SH-130. The survey results mirrored the results from the interviews, with smaller companies (owner–operators) preferring the nontoll route. The incentives that most interested the truckers were off-peak discounts, followed by the incentive of a free trip after a number of paid trips. The average value of travel time savings was $44.20/h.

Price elasticity is critical for managed lane planning. To set an effective pricing policy that can achieve a specific objective–-whether it is to maximize freeway system performance, to reduce vehicle emission, or to capitalize on revenue–-transportation planners and policy makers need to know how users would react to various pricing policies. The issue is even more important when the public has not yet fully embraced transportation pricing. Three techniques have been frequently used for estimating transportation price elasticities: shrinkage ratio, midpoint elasticity, and log arc elasticity. However, little is known about the suitability of the techniques. This paper evaluates these techniques by analyzing their statistical properties and comparing their relative efficiency. The findings suggest that the appropriateness of an estimation technique of price elasticity varies from one circumstance to another. It is important to understand the variations and apply the techniques accordingly.

Road pricing has proved to be an effective means of managing traffic demand, reducing the environmental impact of road traffic, and obtaining revenues. The model employed in this paper is based on the social marginal cost economic theory for assessing the total change in social welfare by means of different indicators. This model has the advantage of comparing different road-pricing systems apart from the traditional ones (simple schemes), such as cordon and kilometric toll. In this case a two-part tariffs scheme has been analyzed. The results show that to optimize the current road capacity, the two-part optimal prices must be determined (optimal combination of access toll and kilometric charge). This will allow a higher increase in social welfare. This increase is obtained by internalizing the congestion social cost (reducing deadweight loss) when diminishing demand to an optimum amount. This model has been applied on the expressway networks of the metropolitan area of Barcelona, Spain. Conclusions show that if demand is reduced by 10%, a favorable change in social welfare takes place, which is 96% higher than if demand is reduced by only 5%. However, if demand is reduced by 15%, such change in social welfare increases by only 20% compared with a 10% demand reduction scenario.

Because of concern about the declining purchasing power of gas tax revenue due to inflation, public opposition to tax increases, and the improved fuel efficiency of new vehicles, the 2001 Oregon legislature created the Road User Fee Task Force (RUFTF) to make recommendations for a potential replacement for the gasoline tax. This paper estimates the distributional impact of the statewide vehicle miles traveled (VMT) fee policy proposed by the RUFTF on individuals with different incomes and residential locations. The methodology employs both vehicle ownership and type choice models and regression-based vehicle use models. This allows an examination of both short- and long-run responses from the affected households. The measures of the distributional impact of the proposed VMT fee include changes in consumers’ surplus, fee-collection agency revenue totals, and overall welfare changes by income and location groups. The results show that the distributional effects of a $0.012/mi flat VMT fee are not significant in either the short or long run and suggest that distributional concerns should not be a hindering factor in the future implementation of the proposed VMT fees.

Resources for roadway infrastructure capacity expansion remain scarce, competition for finances is ubiquitous, and the emphasis continues to shift to operations, management, and efficiency. These conditions point directly to economic benefit–cost analysis, yet economic appraisal of any sort continues to make only meager inroads into institutional decision making. Barriers to widespread practical application include a lack of understanding and inconsistent application. The concept and measure of travel time reliability is a quintessential example of those two barriers. This paper clarifies some of these issues. First is an exploration of how travel time reliability is measured and how it is valued for use in economic analysis. This has become increasingly prominent in just the past 10 years. One remarkable example from a ramp meter study is highlighted. To illustrate the issues further, this discussion is followed by an assessment of 15-min automated detector data during weekday peak periods over 3 years on a section of the Beltline freeway in Madison, Wisconsin. The assessment demonstrates the measure of reliability used does matter and reinforces the need for consistency in practice and for consistency in estimates of the value of reliability. Of those measures in use, this paper recommends standardizing the difference between 90th percentile and 50th percentile (median) travel time, pending further investigation into whether it is a particularly efficient measure. Last, the paper concludes with a suggestion for how to put a value on reliability in the absence of sufficient disaggregate data.

The aim of this paper is to examine the relationship between the availability of transportation infrastructure and services and the pattern of house prices in an urban area and to assess whether public investment in transportation can modify residential property values. This study was developed for the Lisbon, Portugal, metropolitan area (LMA) as part of a broader study that intends to develop new value-capture financing schemes for public transportation in the LMA. The paper focuses on three central municipalities in Portugal (Amadora, Lisbon, and Odivelas), where these effects could be more easily measured because of the existence of a significant variability of public transportation services. The paper tries to determine, with different spatial hedonic pricing models, the extent to which access to transportation infrastructure currently is capitalized into house prices and isolates the influence of three different transportation infrastructures: metro, rail, and road. The results suggest that the proximity to one or two metro lines leads to significant property value changes. Results further indicate that the classic hedonic price model (ordinary least-squares estimation) leads to similar coefficient values of the local accessibility dummy variables compared with the spatial lag model and thus provides a steady basis to forecast the property value changes derived from transportation investment for the study area in the absence of a significant property value database.