UC Davis Institute of Transportation Studies

In 2020, pursuant to Senate Bill (SB) 743 (2013), the California Department of Transportation (Caltrans) adopted guidance requiring that the induced travel effects of capacity expansion projects on the State Highway System be analyzed as a part of the environmental review process under the California Environmental Quality Act. However, despite the fact that induced travel also has economic effects, most conventional benefit-cost analysis tools do not account for induced travel, at least not fully. In this study, the authors examined how induced travel is and can be incorporated into the California Life-Cycle Cost/Benefit Analysis Model (Cal-B/C) maintained by Caltrans. They found that induced travel is not calculated automatically within Cal-B/C. Instead, induced travel must be incorporated manually by the analyst by adjusting the average daily trips on the project information sheet. This can produce wildly divergent benefit/cost ratio outputs depending on whether and how induced travel is incorporated, as demonstrated by the authors’ sensitivity analysis using the benefit-cost analysis prepared for the Yolo 80 Corridor Improvements Project. Indeed, four of the scenarios in the sensitivity analysis resulted in negative benefit/cost ratios, and eight of the scenarios resulted in lower B/C ratios than the baseline result that was actually submitted to the California Transportation Commission. Yet neither Caltrans nor the California Transportation Commission rigorously checks whether Cal-B/C analyses prepared by or submitted to them accurately incorporate induced travel, despite the fact that the benefit/cost ratio projections for proposed highway capacity expansion projects can be instrumental in determining whether those projects get funded. The report concludes with four recommendations for better incorporating induced travel into Cal-B/C analyses.