Transportation Benefit–Cost Analysis: Lessons from Cal-B/C

The California Department of Transportation (Caltrans) assesses more than 100 transportation projects annually for its State Transportation Improvement Program, one of the largest such programs in the country. Caltrans relies on benefit–cost analysis as one of several performance factors, and evaluations must be completed in a few weeks. Caltrans developed a spreadsheet model, Cal-B/C, to provide a common benefit–cost framework and facilitate rapid project evaluation. The model is based on extensive theoretical reviews but is intended to keep the analysis simple. Cal-B/C incorporates rules of thumb to accommodate projects with little upfront evaluation. It can also use summary data from microsimulation and travel demand models. Although this design supports analysis with minimal data, Caltrans has found that the need for accurate and consistent data complicates project evaluation. This paper presents an example of how California applies benefit–cost analysis for objective project appraisals. The paper describes the motivation for Cal-B/C, its structure, applications, and continued evolution. Particular attention is paid to a recent evaluation of projects proposed for a $4.5 billion infrastructure bond measure. The paper also offers lessons for applied transportation performance analysis and proposes areas for further research.