The impact of indirect benefits (reduced travel time, fuel use and emissions) in cost benefit analysis of road safety countermeasures

OBJECTIVE

In cost benefit analysis of road safety countermeasures, all relevant effects on safety, travel time and environment have a substantial impact during economic appraisal. However, in the most widely used road safety appraisal tools such as SafetyAnalyst and International Road Assessment Programme (iRAP), indirect effects related to travel time and environment are not considered. Most economic appraisal studies conducted for road safety countermeasures consider only the safety benefits and ignore the indirect benefits due to lack of models to evaluate them. This study attempts to document the quantitative impact of indirect benefits during economic appraisal of road safety infrastructure investments particularly from the angle of reduced crashes.

METHODS

To this effect, data from 9 European countries and the 20-year infrastructure improvement programme developed for the Netherlands are applied to demonstrate the impact of these indirect benefits through a quantitative study.

RESULTS

The results show that indirect benefits increase the value of benefits by 7%, which improves the cost effectiveness of countermeasures. Consequently, the number of countermeasures selected for implementation are increased due to addition of these benefits. Travel time benefits constitute the largest share of indirect benefits with a contribution of 6% to the overall benefits due to countermeasure implementation.

CONCLUSION

In conclusion, indirect benefits have a substantial impact on the computation of benefits and countermeasure selection process. In order to present improved business cases for road safety infrastructure investments, there is need to include these benefits during economic appraisal process. Travel time benefits have the highest portion of all indirect benefits compared to vehicle operating costs (VOCs) and emission benefits. The study recommends conducting more research related to travel time benefits due to countermeasure implementation.

Making real options analysis more accessible for climate change adaptation. An application to afforestation as a flood management measure in the Scottish Borders

Climate change uncertainty makes decisions for adaptation investments challenging, in particular when long time horizons and large irreversible upfront costs are involved. Often the costs will be immediate and clear, but the benefits may be uncertain and only occur in the distant future. Robust decision-making methods such as real options analysis (ROA) handle uncertainty better and are therefore useful to guide decision-making for climate change adaptation. ROA allows for learning about climate change by developing flexible strategies that can be adjusted over time. Practical examples of ROA to climate change adaptation are still relatively limited and tend to be complex. We propose an application that makes ROA more accessible to policy-makers by using the user-friendly and freely available UK climate data of the UKCP09 weather generator, which provides projections of future rainfall, deriving transition probabilities for the ROA in a straightforward way and demonstrating how the analysis can be implemented in spreadsheet format using backward induction. The application is to afforestation as a natural flood management measure (NFM) in a rural catchment in Scotland. The applicability of ROA to broadleaf afforestation as a NFM has not been previously investigated. Different ROA strategies are presented based on varying the damage cost from flooding, fixed cost and the discount rate. The results illustrate how learning can lower the overall investment cost of climate change adaptation but also that the cost structure of afforestation does not lend itself very well to ROA.

Direct costs of a home parenteral nutrition programme

BACKGROUND & AIMS

Home parenteral nutrition (HPN) is a lifesaving treatment for people with chronic intestinal failure and its cost has been reported to be very high. The purpose of the present paper was to study the direct healthcare and non-healthcare costs associated with the HPN programme managed by a tertiary hospital.

METHODS

Observational, retrospective study of all adult patients on HPN from 11.1.2014 to 10.31.2015 treated at Gregorio Marañón University Hospital (Madrid, Spain). An economic evaluation was undertaken to calculate the direct healthcare (HPN provision, outpatient monitoring and management of complications) and non-healthcare costs (transportation process) of the HPN programme. The variables were collected from medical records, the dispensary and the hospital's financial services. The unit costs were taken from official price lists.

RESULTS

Thirty-two patients met the inclusion criteria. Total direct healthcare and non-healthcare costs amounted to €13,363.53 per patient (€124.02 per patient per day). The direct healthcare costs accounted for 98.32% of overall costs, while the non-healthcare costs accounted for the remaining 1.68%. HPN provision accounted for the majority of the costs (74.25%), followed by management of complications (21.85%) and outpatient monitoring (2.23%).

CONCLUSIONS

The direct healthcare costs accounted for the majority of HPN expenditure, specifically HPN provision was the category with the highest percentage.