Economic Analysis

Transportation is a critical element of success for regions competing in today’s global economy. Public and private leaders seek to invest in transportation systems that will ensure each region’s success in global markets. In addition, decision-makers seek clear, rigorous, and timely analysis of how much economic benefit will be generated from competing infrastructure investments. Cambridge Systematics is recognized nationally for its work with federal, state, and local agencies to plan and manage transportation systems in a way that supports broader economic goals. We also apply our core skills in consensus-building, strategic planning, market research, and decision support to help establish state and regional economic development strategies.

Our Services

• Benefit/Cost Analysis. Investment decision-making requires an understanding of the return of investment for public agencies; this return is determined through benefit/cost analysis (BCA). Cambridge Systematics has refined the methods and tools used to conduct BCA for public transportation investment decision-making for Federal, state, and local agencies. As more emphasis is placed on performance-based planning and programming and increased accountability, BCA is emerging as a critical decision metric for choosing among competing projects. Cambridge Systematics continues to be at the forefront of developing new guidelines and tools for applying BCA for project and program evaluation so that we can assist our clients in making informed decisions that maximize the private, public, and societal benefits of public investments
• Economic Impact Analysis. Cambridge Systematics is renowned nationally for evaluating the economic development impacts of major infrastructure investments. We pioneered the use of econometric models to assess the full economic impact of major transportation infrastructure investments, and adapted these techniques to evaluate other public investments and policies, including military base expansions and closures, utility mergers, environmental policies, growth management policies, and other public infrastructure investments. We combine these techniques with traditional BCA to provide our clients with a clear understanding of the real benefits and costs of investments.
• Prioritization and Decision Support Tools. Faced with shrinking budgets and deteriorating assets, government must consider ways to invest resources wisely. Cambridge Systematics has developed economic analysis tools that support better decisions on resource allocation, needs assessment, and project selection. We have developed the Federal government’s primary economic analysis tools, including the Highway Economic Requirements System (HERS), for the transportation industry. Many of them are employed by hundreds of transportation executives at the state, regional, and local levels. We also have worked with numerous state departments of transportation (DOT) and metropolitan planning organizations (MPO) to develop tools for assessing the economic impacts of transportation investments and supporting informed decision making. These tools include innovative use of geographic information systems (GIS) to make transportation and economic information accessible to decision-makers and the public, and enhance coordination between stakeholders.
• Innovative Finance. Cambridge Systematics staff work at the state, regional, and local levels to design and implement financing strategies that integrate private investment with highly leveraged public funding. We are able to forge consensus and cooperation among diverse private firms and public agencies because we understand the risk and return criteria of private investors and the institutional constraints faced by public agencies. We have experience with tools ranging from debt service and cash management to impact fees and private/public partnerships.
• Economic Development. Cambridge Systematics works with states and regions to develop strategies for enhancing competitiveness in global markets through investments in transportation infrastructure and other public policy areas. We are familiar with the broad range of economic development programs and tools that can be applied in conjunction with infrastructure investments and public policy changes to improve a region’s competitiveness. Cambridge Systematics staff have years of experience working with both public and private entities to encourage participation in programs and investments to support economic growth in a region. Our expertise includes industry cluster development as well as evaluations of infrastructure, workforce, financial, technology, regulatory, and community systems that support economic growth. Our economic development studies have included statewide planning efforts in Florida, Kansas, and Mississippi, all of which are now in implementation.

Why Cambridge Systematics

Cambridge Systematics is a national leader in evaluating the economic impacts of transportation policies, programs, and projects. For more than 30 years, our projects have addressed every mode of transportation, and have supported better decisions on infrastructure improvements and investments, operational enhancements, and pricing strategies. Over the past five years, we have led studies that examine the relationship between transportation and economic growth for state DOTs, MPOs, and transit authorities in Arizona, California, Colorado, Florida, Georgia, Indiana, Montana, New York, Ohio, Oregon, Washington, Wisconsin, among others. Cambridge Systematics has led several landmark efforts, including development of the Florida Strategic Intermodal System to better link the State’s transportation and economic strategies; economic analysis of improvements to corridors of national significance, such as I-95 along the eastern seaboard, I-69 in Indiana and Texas, and I-5 in Washington and Oregon; analysis of the value of investment in the nation’s largest public transit systems, including those in New York, Los Angeles, Chicago, and Philadelphia; and development of leading-edge analytical tools such as the Indiana DOT’s Major Corridor Investment-Benefit Analysis System; the Montana DOT’s Highway Economic Analysis Tool (HEAT); and the U.S. DOT’s Guide to Quantifying the Economic Impacts of Federal Investments in Large-Scale Freight Transportation Projects.

Our work has helped state and local agencies make better decisions about selecting projects and allocating resources; helped chambers of commerce and industry associations build a case for strategic investments in transportation and economic development; and helped elected officials better understand the value of state and local investment in transportation and other foundations for a competitive economy. Our work has led to development of some of the nation’s largest infrastructure projects; successful legislative enactment of sweeping changes in transportation investment strategies and other public policies; and major shifts in the programming and prioritization process in some of the nation’s largest transportation agencies.

You can learn more about our economic analysis services from examples of our recent work.