Identify the impact categories, catalogue them, and select measurement indicators.
1
TECON 480
Spring 2019
Instructor: Beaudoin
Due: April 23, 2019
Assignment #1 (Answer Key)
• While you are welcome to discuss the assignment with classmates and incorporate our
classroom discussions, each student must submit their own assignment
• Assignments are due by midnight on the date indicated (they may be submitted via email or
uploaded to Canvas)
• Late assignments will receive a 25 percentage point penalty for each day it is submitted
beyond the due date
In this assignment, we will begin our analysis of Pierce Transit’s potential investment in bus rapid
transit (BRT) along the Pacific Avenue corridor. See Slides 38-40 in the Class 4 notes for some
background information relating to this project.
This assignment covers Steps 1-3 of the cost-benefit analysis framework. Please provide a separate
heading/section for each of the three steps. These sections will subsequently be used as part of the
final report, after you incorporate the feedback that I provide and as your thoughts develop throughout
the course. Note that there is no minimum/maximum length of the various sections at this point.
Step 1: Specify the set of alternatives.
In this section, discuss the potential alternatives available to the decision-maker and explain/justify
which alternatives you will choose to analyze. Be sure to specify the status quo (or the counterfactual)
that will be used.
For the purposes of our assignment, we will focus on analyzing only two alternatives:
Alternative 1: do not build the BRT (the status quo, which will be considered as the counterfactual)
Alternative 2: build the BRT
Step 2: Decide whose benefits and costs count (standing).
In this section, discuss who the decision-maker is in your analysis, the objective of the analysis that
will be undertaken, and whose benefits and costs should count in the analysis given the context.
For this assignment, we can assume that either Pierce Transit or the Pierce County voters are the
decision-makers. The objective of the analysis is to decide whether or not to build the BRT system,
and we can assume that both Pierce Transit and voters would only want to move forward with building
the BRT if it was worthwhile from society’s perspective.
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For standing, we would have to decide whether only the effects on Pierce Transit residents should be
considered; for this assignment, we will assume that the impacts of the project outlined in Assignment
2 are all related to those with standing in the project.
Step 3: Identify the impact categories, catalogue them, and select measurement indicators.
In this section, discuss the potential impacts of the project and classify them as costs or benefits (or
undetermined, if it is potentially the case that the impact could be either a cost or a benefit). For each
impact, suggest the “physical” units that you would ideally use to measure these impacts; note that at
this point, these impacts should just be identified qualitatively, and you do not have to discuss how
you would quantify/monetize these impacts. As an example, suppose the project was an investment
in a new recycling facility. You may think that one of the impacts would be a reduction in plastic
waste in the landfill, that this would be a benefit to society, and that you would measure it by the
number of tons of plastic “saved” from the landfill over the course of a year.
There are many possible impacts of the BRT project, both in terms of costs and benefits. The key is
to include only effects that are incremental and any changes are caused by the BRT project. It is also
important to properly use economic theory to measure the impacts appropriately (along the lines of
our discussions throughout the class).
For our assignment, we will only be including the impacts that have information provided in
Assignment 2. We should note that this list is not exhaustive and for practical reasons we are limiting
the impacts included in the analysis. For Assignment 2, you should use only the impacts listed in the
Assignment 2 instructions, and not the previous impacts that you outlined in Step 3 of Assignment 1.
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