### Chapter 7 - Economic Appraisal

Posted:

**Thu Apr 21, 2011 6:32 am**I was working on recreating 7.9 Sample Problem in Excel, but I had several questions related to the example.

Table 7-2 presents crash conditions (by severity); is this information utilized in the calculation of benefit-to-cost analysis? or is this information only utilized in the calculation utilizing the predictive method and the empiral bayes method, which is not subject of this example?

The example problem does not provide methodology for the calculation of Nexpected; is this simply several iterations of the predictive method for each major and minor aadt?

How is the AADT (major and minor) calculated for year 1 in the service life? The AADT in subsquent years is simply annual growth of 1.5%, which I can follow, but year 1 seems to be approximately 6.5% of the 22,100/1,650 Major/Minor AADT given at the beginning of the problem. Is there some different methodology for calculating the AADT in year 1 based upon the base AADT?

Is it correct to assume the information presented on page 7-14 related to the assumptions regarding the service life, specifically Annual Traffic Growth 2% and Cost Estimate Method $695,000 are typos? This information does not seem to match the same information presented on page 7-15 within Table 7-5; (Annual Traffic Growth 1.5% and Cost Estimate $2,000,000).

Any help anyone could provide would be most helpful. I wanted to utilize this example problem as a basis for a local cost-to-benefit analysis I need to complete, but was confused by the points noted above.

Table 7-2 presents crash conditions (by severity); is this information utilized in the calculation of benefit-to-cost analysis? or is this information only utilized in the calculation utilizing the predictive method and the empiral bayes method, which is not subject of this example?

The example problem does not provide methodology for the calculation of Nexpected; is this simply several iterations of the predictive method for each major and minor aadt?

How is the AADT (major and minor) calculated for year 1 in the service life? The AADT in subsquent years is simply annual growth of 1.5%, which I can follow, but year 1 seems to be approximately 6.5% of the 22,100/1,650 Major/Minor AADT given at the beginning of the problem. Is there some different methodology for calculating the AADT in year 1 based upon the base AADT?

Is it correct to assume the information presented on page 7-14 related to the assumptions regarding the service life, specifically Annual Traffic Growth 2% and Cost Estimate Method $695,000 are typos? This information does not seem to match the same information presented on page 7-15 within Table 7-5; (Annual Traffic Growth 1.5% and Cost Estimate $2,000,000).

Any help anyone could provide would be most helpful. I wanted to utilize this example problem as a basis for a local cost-to-benefit analysis I need to complete, but was confused by the points noted above.