Benefit-Cost Analysis for Bicycle Investments

Why Benefit-Cost Analysis?
1. Billions of grant dollars available for bicycle investments are being awarded based on benefit-cost analyses and “data-driven decision making.” USDOT TIGER Grants: $3.1 billion over four rounds. FHWA Highway Safety Improvement Program (HSIP)~ $1.3 billion per year since 2005; $2.4 billion in 2013 and 2014. 2. Benefit-cost analysis adds information to the public expenditure process by demonstrating the value of bicycle infrastrucuture to the public and decision makers. For example, the City of Los Angeles recently included benefit-cost figures for each street included in an Environmental Impact Report covering 40 miles of proposed bike lanes. 3. Bicycle investments often have high benefit-cost ratios !
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Most benefits depend on ridership estimates. Bike ridership typically increases in the area 0.5 - 1.5 miles from a new bike facility. If available, use local bicycle counts before and after previous bikeway installations to estimate ridership for proposed bikeways. Use ridership trends to forecast bicycle ridership in future years. If local data is not available, use American Community Survey (ACS) 5-year bicycle commute share estimates.

Forecasting Ridership

Safety Benefits
TIMS Benefit-Cost Calculator is the simplest way to calculate safety benefits but it is limited to California SWITRS accident data. If you have access to geolocated accident data, like SWITRS, query the bicycle accidents up to 1.5 miles from your proposed bikeway. Categorize the accidents by injury severity for each year in your data set. Use the annual data to calculate the multi-year average. Assume that if nothing changes you will have approximately this many accidents per year in the future.

Other Benefits
Reduced Vehicle CO2 Emissions: Monetizing the social cost of carbon emissions: There are more benefits than this poster can handle:

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Download the bicycle facilty cost spreadsheet from and update default unit costs using local cost estimates.


SWITRS Injury Data

NCHRP Report 552: Guidelines for Analysis of Investments in Bicycle Faciltites. was recommended by USDOT during the TIGER grant process. It is a good introduction but some of the benefit estimates were derived from surveys of University of Michigan employees and may not be representative of your city’s population. Use local estimates if possible. UC Berkeley’s SafeTREC Transportation Injury Mapping System (TIMS) website includes a benefit-cost calculator that is simple to use. FHWA/CalTrans HSIP funding applications require a TIMS benefit-cost report. (see reports on table)

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Fatal Severe Other Visible Complaint of Pain

Bicycle Commuter Estimates
0.5 mile Census Tract
0 0.125 0.25 0.5 Miles

0.5 mile 1 mile 1.5 miles
0 0.25 0.5 1 Miles

You can get ACS “means of transportation to work” data and 2010 population data by census tract. Use GIS software to query current ACS bicycle commuter and Census population data for the area around the proposed bikeway. Refer to NCHRP Report 552 for using existing population and ACS data to estimate the new bicycle commuters and new cyclists that will use the proposed bikeway. The reports methodology assumes new cyclists are a function of existing cyclists and their proximity to the new bikeway.

Research has established Crash Reduction Factors (CRF) for various infrastructure treatments. According to FHWA/CalTrans/SafeTREC Local Roadway Safety Manual, a bike lane will reduce bicycle collisions by 35%. Multiply the expected accidents you previously calculated by the CRF for your bike facility to determine the number of prevented injuries. Use USDOT’s “Value of a Statistical Life” chart to quantify the value of the reduced injuries. You may need to convert from the KABCO injury scale to the AIS scale.

Net Present Value
A dollar in the future is worth less than a dollar today. Capital costs accrue upfront and benefits in the future. To accurately compare costs vs benefits you will have to discount future dollars to present dollars. Create a spreadsheet with costs and benefits per year, typically to 20 years. Subtract costs from benefits and discount the values to the present (net T benefit/(1 + discount rate) , where T is the project year). Use 3% for government projects and 7% for private projects.
$30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000

You will multiply each benefit estimate by the number of estimated cyclists to calculate a total benefit.

$5,000,000 $0 -$5,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 West Valley Sherman Oaks - Studio City Downtown Los Angeles

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