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Benefit-Cost Analysis with Nevada Characteristics
AdvisorTian, Zong Z.
Civil and Environmental Engineering
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The efficient allocation of funding for transportation projects is crucial for Nevada’s roadway system. Well-established prioritization frameworks are needed in order to accomplish the allocation of funding for projects that will provide the most benefit for its users. In Nevada, the Nevada Department of Transportation’s (NDOT’s) Performance Analysis Division conducts benefit-cost analysis (BCA) on all capacity projects equal to or exceeding $25 million. In recent years NDOT has used the California Life-Cycle Benefit-Cost Analysis Model (Cal-B/C) as part of their prioritization process. The Cal-B/C Model was developed by the California Department of Transportation (Caltrans). The default economic parameters in this model along with the economic parameters assigned by NDOT were used to run analysis on two projects in the state. This was completed to see how suitable Cal-B/C’s parameters would be for use in Nevada since Cal-B/C’s parameters are specific for California. This thesis also provides recommendations on updating the current economic parameters to better model Nevada’s situation since certain parameters assigned by NDOT were still based on California data. Through a review of existing methodologies used across the country new parameter recommendations were made. Furthermore, an investigation of available BCA software was also conducted to determine if other programs apart from Cal-B/C can meet NDOT’s analysis needs. The two projects selected for the case study were then analyzed using Cal-B/C, BCA.net, and the American Association of State Highway and Transportation Officials (AASHTO) Redbook Wizard. The results of the analysis showed that substantial differences in results did exist when the different models were used. Cal-B/C results were the highest followed by BCA.net. The results from the AASHTO Redbook were not favorable in either analysis. The different methodologies used by the software and the level of detailed information can be attributed to the differences in results. NDOT should continue to use Cal-B/C for general transportation projects where localized benefits will be obtained but NDOT should consider using software such as BCA.net and the Surface Transportation Efficiency Analysis Model (STEAM) for projects having regional level impacts.