What is the difference between MBCA and the full TREDIS Economics Suite?

The free MBCA tool is a benefit-cost calculator – which means it compares project costs with a monetary valuation of changes in travel time, travel cost, safety, air pollution and reliability. Benefit-cost analysis reflects “first-order” impacts of transportation system changes; it does not reflect “wider economic impacts” or reflect “economic feasibility” considerations. MBCA is one of five types of economic analysis included in the full TREDIS Economics Suite. The other four types of economic analysis - which can be of equal or greater concern – are Economic Impact Analysis (assessing wider economic effects on productivity, regional employment, income and GDP), Public-Private Economic Feasibility (assessing cash flow effects), Fiscal Impact Analysis (assessing net tax revenue effects) and Freight Flow Analysis (assessing regional freight and trade flow changes). The MBCA benefit-cost calculator does not depend on information regarding the economy of study area. However, the other types of economic analysis do require specification of a study area, and their results also depend on proprietary information regarding the structure of specified area economy and its taxation systems. They are available via a subscription fee. (Click to view Product Comparison Matrix)

What is the difference between Benefit-Cost Analysis (BCA) and Economic Impact Analysis (EIA)?

In the transportation context, BCA is usually implemented as a comparison of project costs and user benefits, and is the first stage in a broader process of economic assessment.  It is sometimes referred to as engineering-based analysis because all of its elements – construction cost, traffic flow, safety and emissions – can be directly observed or estimated by transportation engineers and planners.  The results – a benefit/cost ratio and net benefit value – are calculated based on the assignment of monetary valuation factors for transportation-related improvements, which are based on either actual cost or a survey-based “willingness to pay.”  BCA is often used as an element in grant applications and project funding decisions.  

EIA, in contrast, assesses the wider effects on the economy – as reflected by jobs and income for area residents.  It goes well beyond direct user benefits to also consider how transportation projects can affect job access, product delivery markets, supply chain reliability, household budgets and business operating costs – leading to changes in productivity, business location patterns and ultimately employment and income growth for the affected area.  EIA is broader than user benefit analysis in BCA in that it considers wider economic effects on area residents (and not just traveler benefits), but it is narrower in that it does not consider personal time savings or other benefits that do not directly affect the flow of money in the economy (even though they may have a value to people).  There is great public interest in EIA for policy, planning and prioritization, and it is often used alongside BCA for project decision-making.  The TREDIS Economics Suite provides both BCA and EIA.  

For more information on BCA vs. EIA, see the USDOT video.

What makes MBCA unique?

There are excellent benefit-cost tools produced by US DOT for specialized and detailed analysis of single modes, including BCA.net and HERS for highways.   However, MBCA is the first free tool that equally covers all forms of air, water, rail and road transportation, as well as non-motorized (pedestrian and bicycle) transportation.  It ends up that there are some important differences among the modes in terms of nomenclature, value of time; treatment of driver, passenger and freight loads; induced demand, and trip balancing when mode switching occurs.  MBCA addresses all of these issues.  MBCA is also set up as a “sketch planning” tool for early stage assessment of project alternatives, meaning that it is very broad in its coverage but not deep in its requirements.  This makes it particularly useful for three types of projects:

1. Single mode projects (e.g., roadway or rail line or airport or seaport improvements) where there are clear ‘no build” vs. “build” alternatives, or multiple project alternatives, which lead to distinct differences in volume of use, travel times, safety or reliability characteristics; or
   
   
2. Single mode projects that also have implications of other modes, such as a transit line that reduces roadway congestion, or a high speed rail line that reduces terminal congestion at an airport, or a ferry service that reduces car delays on a bridge route.
   
   
3. Multiple mode projects, such as coordinated set of airport terminal and access roadway improvements, or coordinated program of transit and highway capacity enhancement along a single congested corridor, or road-rail crossing project that will enhanced safety and reliability for both train and road vehicles. 

What kind of tool is MBCA?

MBCA is an economic tool that is easy to use.  Users are prompted to enter project costs and timing, and describe broad-brush impacts on transportation facility or system performance, such as vehicle or passenger volume, travel times, distances, congestion, reliability and safety.   The system that calculates the economic value of benefits covering not only traveller benefits, but also broader societal benefits including business productivity, pollution and greenhouse gas emissions, fuel use, and safety changes.  The system is transparent; as it provides a series that trace through calculations of resulting public and private benefits and costs, and discount rates can be changed as desired. (MBCA is not designed for later stage refinement of project designs, in which facility design, geometrics and control features may also become important.)  

What feature makes MBCA stand out?

A distinguishing feature of MBCA is that it enables users to define custom modes, sub-modes, time periods and trip purposes.  This enables users to define and compare an unlimited number of modal variants that differ in capacity, fuel use and performance, such as: Rail Transit (BRT, light/heavy rail, express/local service, high speed/conventional rail), Bus Transit (van, bus, articulated bus, double-deck bus), aviation (prop, corporate jet, regional jet) and Active Transportation (walk, bicycle).  And it enables comparison of special time periods such as peak tourism vs. off-peak seasons.  Some of these options are already set up; others can be created by the user.  In the weeks ahead, the TREDIS team will be setting up additional illustrative examples

How can MBCA be used?

MBCA is designed to provide social benefit-cost accounting for an individual transportation project and its alternatives. For broader applications - such as public policy evaluation, strategic planning or prioritization processes - a more comprehensive approach may be desired. Call TREDIS staff for information on adaptation of these tools for those broader uses.

Links for more information

Please check out the following resources:

• TREDIS-MBCA Knowledge Base and Forum
  
  
• TRB Economics Committee BCA Web Guide – explains how to conduct BCA, and differences from economic impact analysis
  
  
• FHWA BCA Guide – explains how to conduct BCA, and differences from economic impact analysis
  
  
• USDOT (TIGER) Benefit-Cost Resource Guide for Surface Transportation Grants
  
  
• USDOT (FAA) Benefit-Cost Requirements for Aviation System Grants
  
  
• TRR Article on Multimodal BCA