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Published: 1991

Total Pages: 100

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Four reports recently published by the Federal Highway Administration (FHWA), the American Association of Highway and Transportation Officials (AASHTO), the National Council on Public Works Improvement, and the Congressional Budget Office (CBO) present information that is important in evaluating highway needs in the United States. The objective of the study is to provide a comparison and critique of the four reports. Special emphasis is placed on evaluating the rate-of-return analysis for highway investment in the CBO report. Using the CBO procedure and the CBO's assumed (implicit) useful lives, it can be concluded that about 25 billion dollars of investment in 1985 (and increasing over time at the same rate as traffic growth) is economically justified for highway investment on existing locations, as compared to an actual expenditure of about 13 billion in 1985. However, the CBO uses the assumption that investments made at the end of the analysis period give only 10 years of benefits. Using a more realistic useful life for highway investments would justify a somewhat higher investment level, probably considerably more than double current capital spending. The correct results using CBO's own analysis procedure support the National Councilon Public Works Improvement's recommendation that capital spending for highways should be at least doubled.