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Quantifying the Benefits and Costs of Federal Regulations

Every proposed federal transportation regulation is a two-sided coin. There are potential benefits and costs. New rules might prevent injury, but might also be costly to roll out across an entire transportation mode. 

Benefit-cost analyses provide transportation regulators with a full scope of the effort and expense associated with new rules, along with their potential impacts on the traveling public. Proposed federal regulations must include benefit-cost analyses.

Agencies across all transportation modes turn to Volpe for evaluation expertise on regulations that affect the travel of people and goods by air, pipeline, rail, road, and water. These regulatory analyses form the foundation for smart transportation decisions.

The Challenge

Every benefit-cost analysis is different. Volpe economists work on proposed regulations that affect a range of issues:

  • Accessibility 
  • Hazardous materials
  • Vehicle and aircraft safety
  • Transit asset maintenance

These and many other areas of analysis require the ability to apply economic principles to specific situations and goals.

It’s also often up to Volpe economists to find signals among reams of data noise. If a proposed rule is spurred by a notable incident, Volpe’s team has to figure out whether the incident was a fluke or part of a pattern, and sometimes play detective to round out otherwise scant data.

The Solution

Volpe economists build a story for each cost-benefit analysis. When raw data is unavailable, they mine the federal record for intelligence to help round out the story. They interview industry vendors and government officials for insights on labor and material costs, environmental and property impacts, incidents that could be avoided, and other parameters.

The stories that Volpe economists piece together—by combining investigation and statistical expertise—show how new regulations and technologies affect industry, labor, governments, and travelers.  

The Impact

Volpe benefit-cost analyses provide transportation regulators with a body of information to prioritize investments that have a strong return on safety, compared to total costs.

Better Crosswalks for People with Disabilities

pedestrian in wheelchair pushing signal button at a crosswalk

For a regulation from the U.S. Access Board, Volpe economists analyzed the benefits and costs of proposed mandates for pushbuttons, detectable warning surfaces, and other crosswalk infrastructure for individuals with disabilities, and how those mandates would fiscally affect communities with fewer than 50,000 people.

Volpe economists estimated total costs for the requirements, including yearly costs to install or replace pedestrian signals and pushbuttons at more than 13,000 intersections around the country. The analysis qualitatively addressed benefits of improving pedestrian crossings for the roughly 55 million disabled individuals in America, and impacts on small communities. The U.S. Access Board is expected to take final action later this year.

Preventing Pipeline Incidents with Excess Flow Valves

gas meter at a residential building

Incidents involving gas distribution pipes are very rare, but they can be catastrophic. For a proposed regulation from the Pipeline and Hazardous Materials Safety Administration, Volpe economists analyzed the impact of expanding the use of excess flow valves (EFVs), which halt the flow of gas if there is a pipe break or rupture. EFVs are required for single-family residences, and the proposed rule would expand the requirement to multi-family homes and small businesses.  

Volpe economists examined the costs of lives lost, injuries, and property damage from previous gas line incidents. During the 1990s, there were three major incidents that could potentially have been prevented with EFVs. One incident in Bergenfield, New Jersey, in the mid-2000s incurred costs of roughly $32 million. Even if EFVs prevented a small number of similar incidents, the proposed rule would be cost-effective and major industry stakeholders view EFVs as a “common sense safety measure with minimal cost impact,” according to Volpe’s report. PHMSA is expected to make a final rule early next year.

From better crosswalks to safer gas lines and much more, economic analysis at Volpe reveals the numbers behind new technologies and policies so regulators and leaders across the transportation spectrum can make informed decisions.

Updated: Wednesday, March 7, 2018