Applying Benefit-Cost Analysis to Intelligent Transportation Systems (ITS) and the Australian Context

An "Intelligent Transportation System" (ITS) is a broad term encompassing a wide-range of individual technologies, from simple "smart signs" to real-time electronic monitoring and management of traffic flows. The use of such technologies is often touted as a way of easing traffic congestion, increasing safety, improving environmental quality, and eliminating the need for construction of new road or transit capacity by using existing capacity more effectively. However, actual measurement and analysis of the total costs and total benefits of ITS is rarely done, even though ITS can require a substantial capital and ongoing operating investment. This paper will review the (rather sparse) literature on benefit-cost analysis of ITS; identify the specific technological components which make up ITS; discuss how to apply a benefit-cost methodology to a generic ITS ‘project’; and explore how benefitcost analysis of ITS in Australia's capital cities might properly proceed.