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Economic Impact Analysis

What is it? What is new? What does this mean for existing users?

 

economic impactWhat is it? Economic Impact Analysis calculates the impact of a project, plan or policy on the economy, and shows incidence and distribution of effects across space (areas), over time, and among elements of the economy (households and industries). This tool portrays distributional impacts, making it possible to assess the ability of projects to address strategic policy goals -- such as supporting regional growth, revitalizing distressed areas, reducing unemployment, generating higher paying jobs, increasing regional productivity and competitiveness, leveraging private investment, and supporting trade and high tech development. Strategic policy achievement is a key criteria for establishing the “business case” for a project (along with consideration of efficiency and financial feasibility).

The economic impact module of TREDIS has the ability to show how economic impacts vary among alternative projects, modes, corridors, and transportation services. It is sensitive to changes in transportation performance metrics related to travel time, cost, market access, reliability, and intermodal connectivity. This makes it highly valuable for assessing long range plans, prioritizing alternative investments, and evaluating alternatives for a given project. Local, regional and state agencies use TREDIS for this purpose, making it the most widely used economic impact tool for transportation economic impact assessment.

What is new? TREDIS 5 introduces a major enhancement of our core economic impact model for the US. For the last four years, we’ve been working on an LTE (Long Term Evolution) process towards a broader equilibrium modeling platform (see inset box for technical explanation).

Technical Innovation. The US version of TREDIS incorporates a new RD2 (Regional Dynamics, 2nd generation) economic model. It incorporates a dynamic, equilibrium structure to represent year-by-year changes in labor supply, demand and prices, as well as commuting and migration responses to transportation changes. It also incorporates a more sophisticated multi-regional simulation of freight and trade flow impacts. It adopts a more transparent format to show how transportation scenarios can shift the relationship of labor, capital and transportation costs, lead to productivity change, and thus affect a region’s economic competitiveness and growth.

These changes are fundamental and dramatic, and provide a more robust capability for policy and project assessment. The system enables “forecasts” of the future impacts of proposed projects, and “backcasts” to assess past impacts of built projects. It can assess effects of changes in industry and vehicle technologies over time, and it enables insights into the evolution of regional economies over time, and spillover of impacts to other areas. 

Results are shown via enhanced graphical maps and charts. There is an expanded set of reports, which are accessed via a format that is notably simpler for users. It starts with high level summary graphs, and enables users to see the underlying data tables. Users can then click on data rows to “drill down” and see further details in terms of time (years), space (regions), and elements of the economy (industry sectors).

What does this mean for existing TREDIS users? Users will see dramatically improved graphical and tabular reports with enhanced ability to “drill down” and see details behind EIA results. We have implemented the LTE process incrementally, so most users will see little change in the overall calculation of economic impacts for existing projects. However, US model users who test extreme and complex changes are likely to now see more realistic responses and more complex inter-regional shifts being portrayed, and capabilities to handle a far broader set of scenarios than in the past. In the near future, users of our Canadian and Australian models will soon see many of the same changes in terms of expanded policy assessment capabilities and a new graphical reporting of results. We are working to further expand the multi-regional capabilities of those models. TREDIS is also set up to enable economic models for other nations.

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