VALUE - Some Thoughts

The VALUE impact of our projects or programs is not something we routinely think about as a measurable metric. We just know that we are “doing good things” and tend to focus our daily efforts on reducing the cost side of the value vs cost relationship because cost is something upon which we can typically have some direct impact.

Value, however, is something we should have at least a sense of its magnitude or we will potentially ignore processes and programs that can positively impact the quality of life we provide our ultimate customers, the users of the highways. Below is a list of potential areas in which we can have influence on their quality of life:

  • Life itself

  • Permanent Disability

  • Personal Injury

  • Vehicular Damage

  • Infrastructure Damage

  • First Responder Costs and Risks

  • Congestion Costs and Risks

  • Hazardous Materials Risks

  • Vehicular Wear

  • Cargo Damage

  • Passenger Comfort

From this list, lets extract a few as examples that we can assign values for analytical purposes.

First, while we would all generally agree that a human life is priceless, many entities have given it a dollar value so that analyses can be performed. The value ranges from 5 to 10 million dollars. The EPA assigns 9.1 million, while the federal Department of Transportation assigns roughly 6 million. The value given to permanent partial disability varies widely based on severity and other variables but averages at roughly a tenth of the life value. Congestion is said to have cost Americans 305 Billion dollars last year with the vast majority due to insufficient peak network capacity, but a significant portion was due to maintenance imposed reduced capacity and traffic incidents.

An example of where understanding the value of an activity can impact our decisions is in testing for skid resistance. Many agencies only test reactively when there is an elevated accident rate in a particular section of highway. Others test proactively collecting network skid resistance data on a routine basis. In deciding the approach to take, each agency should be considering that one in every 140 accidents is fatal and, on average, a single accident has a direct cost of $7,500 that needs to be combined with the associated costs (First Responders, Congestion etc.) to determine total impact on the user’s quality of life. Should we be using accidents as the skid resistance measurement method to locate substandard sections when nondestructive methods are available?

Another case where a value analysis should come into play is when we consider the development and implementation of measurement technologies that minimize the impact on the traveling public. These programs can be quite expensive since they typically involve developing both new collection and analysis methods. These costs, however, can be fully justified when the value associated with the process is considered.

I suggest that we keep investing to find better ways to provide the optimum value - cost relationship available for those that use our highways.

John Andrews