Inflation and Highway Economic Analysis
Publication: Journal of Transportation Engineering
Volume 109, Issue 5
Abstract
Increases in funding highway construction and maintenance programs have failed to keep pace with inflation over the past decade. It can be shown that the reduction in funding is an indirect result of inflation. Under these conditions, the effects of inflation cannot be ignored in engineering economic evaluation of alternatives. This paper develops the methodology for incorporating the effects of inflation in economic analyses within the current highway funding scenario. The magnitudes of the consequences of ignoring the effects of inflation are shown to be significant. The situations most profoundly affected are the evaluation of replacement alternatives versus maintenance of existing facilities and the deferring of needed capital expenditures.
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References
1.
Cooper, T. W., “State Highway Finance Trends,” Transportation Research News, No. 98, Transportation Research Board, Jan.–Feb., 1982, pp. 1–5.
2.
Phillips, B. A., and Beaman, R. T., “Dollar Needs to Preserve and Restore U.S. Roads,” Transportation Research News, No. 93, Transportation Research Board, Mar.–Apr., 1981, pp. 2–5.
3.
“Report to the Congress—Deteriorating Highways and Lagging Revenues: A Need to Reassess the Federal Highway Program,” Report No. CED‐81‐42, Comptroller General of the U.S., Washington, D.C., Mar. 5, 1981.
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Copyright © 1983 ASCE.
History
Published online: Sep 1, 1983
Published in print: Sep 1983
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