Case Study:
Portland, OR

Case Study:

Portland, Oregon

Methodology

Benefit-Cost Analysis

A benefit-cost ratio for each alternative can be computed by dividing the present (discounted) value of total user benefits obtained from STEAM by the present value of total capital costs. Alternatively, the benefit measure can be taken to be the gain in total personal income, as determined from the REMI model.Total user benefits from STEAM should not be added to total benefits from REMI, since this would double-count some benefits.

Personal income is broader than user benefits in that it includes benefits to non-users of the transportation system. However, it can be a conservative measure of the true income impact, insofar as there is also some net business income (profit) generated, which is not counted in the measure. Some of that profit may be paid out as dividends to local business owners or else reinvested locally in buildings, equipment, or labor - thus further improving the economic base of the region.

Also, the change in personal income does not measure the benefits to traffic that does not have an origin or destination in the region. In addition, in this analysis, only work-travel user benefits were included in the economic model, so the income benefits shown by REMI do not include the full range of user benefits. For a more complete benefit-cost accounting, the user benefits from STEAM not included in the REMI model (i.e., non-work-travel benefits) could be added to the gain in personal income measured by REMI to obtain a measure of total benefits.

The project may result in other types of benefits and costs that were not included in this analysis. Income created by project construction may be considered as a type of benefit; however, it also has an offsetting opportunity cost (i.e., the benefits foregone from spending the money in alternative ways). Externalities and other benefits and costs that are difficult to quantify (i.e., emissions, community impacts, land use shifts) were not considered in this analysis.

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