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Mid-America Transportation Center

Model for Predicting the Impact upon Economic Development Resulting from Highway Improvement Projects

Final Report
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Researchers

  • Principal Investigator: Eric Thompson (ethompson2@unl.edu (402)472-3318)
  • Graduate Students
  • Kanou Comlavi
  • Mallory Dimmit
  • Project Status
    Complete
    About this Project
    Brief Project Description & Background
    We estimated the economic impact of highway investment projects in Nebraska based on 47 major investment projects in the state from the last two decades. The relative growth of manufacturing activity in counties receiving highway investments was modeled as a function of the characteristics of the highway investment project (i.e., types of project, amount of investment) and the characteristics of the county receiving the investment (i.e., population, industrial structure, preparation for economic development). We also conducted a literature review on highways and economic development and a survey of how highway departments in other states incorporate economic development into highway investment decisions.
    Research Objective
    The Nebraska Department of Roads (NDOR) has an interest in integrating state economic development impact as another factor in prioritizing transportation investments. Such efforts require the development of a comprehensive model that can be used to estimate a consistent final measure of economic development impact that can be readily integrated into existing prioritization formulas
    Potential Benefits
    This project will impact highway planners and economic development officials. The empirical findings from this research project were used to develop an economic model to predict the economic impact of highway investments in Nebraska. That model was also incorporated into an Excel spreadsheet that can be used by highway planners or local economic developers to run simulations.
    We found that several states systematically include economic development considerations as one factor in decisions about highway investments, though economic development is a secondary criterion relative to engineering issues and traffic flow considerations. It would be reasonable for the Nebraska Department of Roads to adopt a similar approach and this project has provided a model which can be used for that purpose.
    Abstract
    The Nebraska Department of Roads through Planning and Project Development prioritizes potential highway investments in Nebraska on an ongoing basis and in the development of its 6-Year Transportation Plan. Investment projects are prioritized according to multiple criteria, including benefit-cost analysis, but the Department has an interest in integrating state economic development impact as another factor in prioritizing transportation investments. Such efforts have begun, including modeling as part of the TIGER grant program. However, the Department requires the development of a comprehensive model that can be used to estimate a consistent final measure of economic development impact that can be readily integrated into existing prioritization formulas. The objective of this proposal is to initiate and develop a comprehensive model that can be used to estimate the statewide economic development impact of transportation capital improvement projects such as road widening, new interchanges, geometric corrections, bypasses or highway/railroad grade separations. The comprehensive model would produce consistent metrics (i.e., apple to apple comparisons) across different types of highway projects, and therefore, could be used to develop a single measure of economic development impact resulting from highway improvement projects for use in project ranking. Results of such a comprehensive model would also vary by relevant factors such as the volume of traffic on the improved highway, or the level of population or economic activity in the region where the highway improvement takes place. This comprehensive model would be developed over the course of the 2011 fiscal year. The model could be extended to asset preservation and maintenance projects as part of a subsequent research study.
    Project Amount
    $ 45,621