Why Economic Analysis for Transportation Projects Makes Sense

As Congress haggles over a new transportation bill, a report out last week argues that all stakeholders would be better served if state and federal governments conducted rigorous economic analysis before spending money on transportation projects.

1 minute read

June 9, 2012, 9:00 AM PDT

By Jonathan Nettler @nettsj


Ryan Holeywell summarizes the findings of the report, published by the Eno Center for Transportation, a nonpartisan think tank. "It's an argument that seems painfully obvious – which the author concedes – yet it isn't the norm in government. Even as the states and feds struggle to find money to pay for transportation projects, they typically don't conduct the planning needed to ensure they're getting the best return possible when they invest in infrastructure, argues author Nicolas Norboge, an assistant researcher at the Texas Transportation Institute."

You would think that cost-benefit analysis of transportation projects would be the norm to help officials prioritize projects and to assist transportation advocates in making their case for funding. However, because "most federal surface transportation funding is distributed to states and localities based on formula grants, and not a process that targets investment," there is no incentive to conduct rigorous economic analysis.

"While the pending highway bill currently being negotiated in Congress has some reforms when it comes to promoting performance metrics and economic analysis, most funding would continue to be formula-based."

Thursday, June 7, 2012 in Governing

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

Map of Haussmann's redesign of Paris in the 1850s through 1870s under Napoleon III.

In Urban Planning, AI Prompting Could be the New Design Thinking

Creativity has long been key to great urban design. What if we see AI as our new creative partner?

June 30, 2025 - Tom Sanchez

Street with parking protected bike lane and parked cars in downtown Portland, Oregon.

Portland Raises Parking Fees to Pay for Street Maintenance

The city is struggling to bridge a massive budget gap at the Bureau of Transportation, which largely depleted its reserves during the Civd-19 pandemic.

July 8 - Willamette Week

Aerial view of Spokane, Washington with river in foreground.

Spokane Mayor Introduces Housing Reforms Package

Mayor Lisa Brown’s proposals include deferring or waiving some development fees to encourage more affordable housing development.

July 8 - The Spokesman-Review

Close-up on black and white "Bike Lane Ends" sign with bike logo.

Houston Mayor Kills Another Bike Lane

The mayor rejected a proposed bike lane in the Montrose district in keeping with his pledge to maintain car lanes.

July 8 - Houston Public Media

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.

Associate/Senior Planner

Gallatin County Department of Planning & Community Development

Senior Planner

Heyer Gruel & Associates PA