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FHWA Home / Safety / HSIP / Highway Safety Improvement Program Manual

4.0 Planning: Project Prioritization

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After contributing crash factors and potential countermeasures have been identified, the next step is to prioritize countermeasures and projects for implementation.  Unit 4 focuses on project prioritization processes and applying them to the locations identified with potential for safety improvement.  A variety of methods for prioritizing safety projects are presented, including benefit/‌cost analysis, ranking, and optimization approaches.

4.1 The Objective Approach

Once locations with potential for safety improvement and potential countermeasures have been identified, the next step is to establish priorities for implementing these projects.

Safety is a complex issue and usually no single solution can completely solve an identified road safety problem.  Solutions may vary in cost; involve an educational, engineering, or enforcement approach; or be categorized as a “quick fix” or a long-term strategy.  Safety professionals are constantly challenged to weigh the menu of possible solutions and prioritize those which best address the problem given existing constraints and resources.

Quantitative analysis should be used whenever possible in the prioritization process, which typically involves identifying and comparing cost, effectiveness, and resilience (i.e., length of effectiveness) for each countermeasure or program based on the latest research.

Quantitative information lends objectivity to a decision-making process which might otherwise be dominated by subjective judgment or political considerations.  It helps ensure the maximum safety benefit will be obtained for the amount of funds invested.

Various quantitative project prioritization methods (or project selection methods) can be used to compare alternative projects for a single site, across multiple sites, or for an entire network.  Projects can be prioritized by simply ranking them based on specified factors (e.g., project cost, total number of crashes reduced, etc.) or a project’s benefit/‌cost ratio (discussed later in this unit).  Alternatively, projects can be prioritized using an optimization process which maximizes the safety benefits based on budget and other constraints.

Challenges to the Objective Approach

Many considerations may enter into project selection beyond safety.  These considerations, some of which may be quantified, play an important role in the project selection process and include the following:

All these factors may play a role in project prioritization, but transportation safety professionals generally prioritize projects based on what will achieve the greatest results within the available funding constraints.  Some safety investment outcomes are more easily measured than others.  As an example, a reduction in the number of crashes with an intersection improvement is more easily measured than a public awareness campaign focused on deterring driving under the influence of alcohol.  In any event, every attempt should be made to establish the quantitative benefit of expected outcomes and these metrics should at least provide weight, if not determine, project selection.

Quantifying these benefits can be accomplished as part of a benefit/‌cost analysis.  Benefit/‌cost analysis is a quantitative measure commonly used in prioritizing projects and countermeasures.  The next section provides guidance on how to estimate project costs and benefits.

4.2 Benefit/Cost Analysis

A benefit/cost analysis compares all of the benefits associated with a countermeasure (e.g., crash reduction, etc.), expressed in monetary terms, to the cost of implementing the countermeasure.  A benefit/‌cost analysis provides a quantitative measure to help safety professionals prioritize countermeasures or projects and optimize the return on investment.

Some safety countermeasures have a higher-cost value than others.  Geometric improvements to the road, such as straightening a tight curve to reduce run-off-road crashes, tend to be very expensive.  Installing a “curve warning” sign and in‑curve delineation addresses the same problem, but at a much lower cost.  Although both countermeasures address the same problem, the actual safety benefit will not be the same.  Straightening the curve would be expected to provide a greater benefit compared to installing the sign and delineation, since it is removing the potential hazard.  While the sign provides the driver with advanced warning of the curve and delineation can help the driver recognize and negotiate through the curve, it is still up to the driver to reduce speed.  Safety professionals take the relative costs and benefits into consideration when prioritizing among countermeasures.

Part of calculating the cost of a countermeasure is considering how those costs vary over time, including any maintenance costs, as well as the relative resilience or “lasting power” of the countermeasure.  One countermeasure may be just as effective as another in the short term, but less cost-effective over a longer time period.  For example, installing speed cameras along a corridor requires significant up-front cost, but over time may be less expensive than an aggressive law enforcement program.  Formal benefit/‌cost analysis takes resilience into account by calculating all of the project benefits and costs over a given time period.  This allows comparison of countermeasures even though the timing of their impact varies.

Safety countermeasures have many direct safety benefits, including reductions in injuries, fatalities, and damage to personal property.  Other direct benefits may occur, such as reduced queuing through signal synchronization.

Converting Benefits to a Monetary Value

A benefit/cost analysis expresses benefits in monetary terms, which requires an estimate of the number of crashes avoided as a result of the countermeasure, and the monetary value of each avoided crash.  When available, CMFs should be used to determine the expected reduction in crashes.  When CMFs from a quality study are not available, especially for nonengineering countermeasures such as educational or enforcement strategies or for experimental engineering treatments, safety professionals should use their subjective judgment and research evaluations when selecting countermeasures.  Proven treatments should be considered along with experimental/‌untried treatments.

One limitation to using benefit/cost analysis is fewer crashes may not always result in a positive outcome.  For instance, cable median barriers are an accepted strategy for reducing the incidence of head-on collisions in run-off-road crashes.  They do not necessarily reduce the number of run-off-road crashes, but do improve safety by reducing crash severity.  Safety practitioners should consider both the likely change in number of crashes and the likely change in crash severity when calculating the benefits of a safety countermeasure.

The monetary value of crashes avoided is based on a dollar value of crashes by type and severity which many states and local agencies have developed.  Costs can also vary by the type of vehicle involved (motor carrier versus personal vehicle).

Another way to determine the cost of a crash is to use the U.S. DOT’s Value of Statistical Life (VSL).  In 2009, the U.S. Office of the Secretary of Transportation (OST) issued a memorandum updating the cost to avert a fatality to $6.0 million.  VSL provides fractional values for use when assessing the benefit of preventing an injury crash based on the Maximum Abbreviated Injury Scale (MAIS) developed by the Association for the Advancement of Automotive Medicine as shown in Table 4.1.  The injuries are ranked on a scale of one to six, with one being minor and six being fatal.

Table 4.1 Relative Disutility Factors by Injury Severity Level (MAIS)

MAIS Level

Severity

Fraction of VSL

MAIS 1

Minor

0.0020

MAIS 2

Moderate

0.0155

MAIS 3

Serious

0.0575

MAIS 4

Severe

0.1875

MAIS 5

Critical

0.7625

MAIS 6

Fatal

1.0000

Source: Office of the Secretary of Transportation (2009).

Using the MAIS scale in combination with the VSL will result in an injury cost for the different severity levels.  However, these injury costs must be converted to a crash cost.  Usually more than one injury and/or severity is associated with a crash.  Typically an average number of injuries and severities are weighted to determine an average crash cost.  For example, in a fatal crash there will typically be other injuries associated with the crash which may not be fatal; therefore, an average cost must be developed to account for the other injuries.

The “KABCO” injury scale also can be used for establishing crash costs.  This scale was developed by the National Safety Council (NSC) and is frequently used by law enforcement for classifying injuries:

The 2005 FHWA study, Crash Cost Estimates by Maximum Police-Reported Injury Severity within Selected Crash Geometries, provides crash cost estimates for several combinations of KABCO injury severities for 22 injury crash types.  The NSC is another source for obtaining crash cost information by severity.

Crash costs by severity level were estimated as part of the development of the HSM.  These costs were developed based on the KABCO scale and are shown in Table 4.2.  If a state has not developed their own crash costs, these costs could be used to calculate safety benefits.

Table 4.2 Crash Costs by Injury Severity Level

Injury Severity Level

Comprehensive Crash Cost

Fatality (K)

$4,008,900

Disabling Injury (A)

$216,000

Evident Injury (B)

$79,000

Fatal/Injury (K/A/B)

$158,200

Possible Injury (C)

$44,900

PDO (O)

$7,400

Source:  Highway Safety Manual, First Edition, Draft 3.1, April 2009.

Since the service life of countermeasures varies, the annual monetary safety benefit should be converted to a present value so projects can be compared over a given time period.  States typically have a list of the service lives of countermeasures to use for estimating project costs.  Two methods are presented here for converting benefits to a present value.  The first method is used when the annual benefits are uniform throughout the service life of the project, and the second is used when the annual benefits vary throughout the service life of the project.

Method 1:  Uniform Annual Benefits

The present value of the safety benefits for a specific site v is calculated by multiplying the total annual monetary benefits by the factor that converts a series of uniform annual amounts to its present value.  The factor is described below.

Where:

PVBv         =    present value of the safety benefits for a specific site, v.

(P/A,i,n)   =    is a factor that converts a series of uniform annual amounts to its present value.

The factor that converts a series of uniform annual amounts to its present value is equal to the difference between the sum of 1 plus the discount rate to the power n (service life of countermeasure in years) minus 1 divided by the discount rate times the sum of 1 plus the discount rate to the power n.

i                 =    minimum attractive rate of return or discount rate (i.e., if the discount rate is 4 percent, i = 0.04).

n                =    year in the service life of the countermeasure(s).

For example, if the expected lifespan of a project is five years, the discount rate is four percent, and the annual monetary benefit is $1,667,500, the present value of the safety benefits is calculated as follows:

The conversion factor for this project is equal to the difference between the sum of 1 plus 0.04 to the power of 5 and 1 divided by 0.04 times the sum of 1 plus 0.04 to the power 5, which equates to 4.452

The present value of the benefits for this project is equal to $1,667,500 multiplied by 4.452 or $7,423,414.

Method 2:  Nonuniform Annual Benefits

The safety effectiveness of some countermeasures is not consistent throughout the project, such as retroreflectivity of lane markings which change over time.  When the benefit of the countermeasure varies over the service life of the project, nonuniform annual monetary values should be calculated for each year of service, which are then combined to determine a single present value.  Start by calculating the present worth values for each year of service:

The present worth value for each year of service is equal to the total annual monetary benefits multiplied by a factor that converts a single future value to its present value.  The factor is described below.

Where:

(P/F,i,n)    =    is a factor that converts a single future value to its present value.

The factor that converts a single future value to its present value is equal to the sum of 1 plus the discount rate to the power of negative n.  N is the year in the service life of the countermeasure.

i                 =    discount rate.

n                =    year in the service life of the countermeasure(s).

The individual present worth values are then added together to develop a single present worth value for the safety benefits of the countermeasure.

For example, the annual monetary benefits associated with a safety improvement for each of the five years of a project’s service life are provided in the following table.  This discount rate is four percent.

Year in
Service Life

Annual Monetary
Value of Benefits

(P/F,i,n)

Present Value
of Benefits

1

$923,237

0.962

$887,728

2

$929,655

0.925

$859,518

3

$935,235

0.889

$831,421

4

$912,879

0.855

$780,333

5

$931,880

0.822

$765,937

Total

 Not Applicable

$4,124,937

The first step is to calculate the factor that converts the future value to a present value for each year.  For the first year:

The factor that converts a single future value to its present value for the first year of the service life is equal to the sum of 1 plus the 0.04 to the power of negative 1, which equates to 0.962.

The factor is calculated for each of the years as shown in the above table, and then the annual monetary benefits are multiplied by this factor to obtain the present value of the benefits.  For the first year:

The present value of the benefits for the first year is equal to $923,237 times 0.962, which equals $887, 728.

The present value of the benefits is then summed for each year to obtain the total present value of benefits, which is $4,124,937 for the service life of this project.

Project Cost Estimation

The project cost estimation procedure for evaluating safety countermeasures follows the same process as cost estimates for other construction or program implementation projects.  Project costs are unique to each site and proposed countermeasure and may include costs associated with:  right-of-way acquisition, material costs, grading and earthwork, utility relocation, environmental impacts, maintenance, and cost related to planning and engineering design work prior to construction.

According to AASHTO, all of the costs incurred over the service life of a project should be incorporated in the present value cost calculation, including all future maintenance, construction, or operating costs expected to occur during a project’s lifespan.  Chapter 6 of the AASHTO Redbook (The AASHTO Redbook addresses benefit/cost analysis for highway improvement projects.¬†It provides decision-makers with a clear description of the approach and understanding of the results of project benefit/cost analyses along with sufficient detail for practitioners to perform these technical analyses.¬†Specifically, it concentrates on highway-user benefits and costs and on project-level analyses.) provides additional guidance on categories of costs and their treatment in a benefit/‌cost analysis for:

To conduct a benefit/cost analysis, the project costs need to be expressed as present values.  Typically construction and/or implementation costs already are expressed as present values; however, any future costs will need to be converted to present values using the methods presented in the benefits section.

Once the project benefits and costs have been estimated, they can be used to prioritize alternative countermeasures at a particular site or several projects across various sites.  The next two sections focus on these prioritization methods.

4.3 Countermeasure Evaluation Methods

Economic evaluations should be conducted on alternative countermeasures to verify a project is economically justified, meaning the benefits are greater than the costs.  The net present value method and a benefit/cost ratio are two methods for evaluating the economic effectiveness and feasibility of safety improvement projects at a particular site.  The cost-effectiveness index can be used when it is not possible to express the benefits in monetary terms.

Net Present Value

The net present value (NPV) method, or net present worth (NPW) method, expresses the difference between the discounted costs and discounted benefits of a safety improvement project.  The costs and benefits are “discounted” meaning they have been converted to a present value using a discount rate.

The NPV method has two basic functions.  It can be used to determine which countermeasure(s) provides the most cost-efficient means based on the countermeasure(s) with the highest NPV.  It also can determine if a project is economically justified meaning a project has a NPV greater than zero (or the benefits are greater than the costs).

The NPV is calculated based on the present value calculations of the project benefits and costs previously discussed.

NPV = PVB – PVC

Where:

PVB = Present value of benefits; and

PVC = Present value of costs.

A project is economically justified if the NPV is greater than zero.  This method identifies the most desirable countermeasure(s) for a specific site, and it also can be used to evaluate multiple projects across multiple sites.

Benefit/Cost Ratio

The benefit/cost ratio (BCR) is the ratio of the present value of the benefits of a project to the present value of costs of the project.

BCR = PVB/PVC

Where:

PVB = Present value of benefits; and

PVC = Present value of costs.

A project with a BCR greater than 1.0 is considered economically justified.  However, the BCR is not applicable for comparing various countermeasures or multiple projects at various sites; this requires an incremental benefit/‌cost analysis.

Cost-Effectiveness

In situations where it is not possible or practical to monetize countermeasure benefits, a “cost-effectiveness” metric can be used in lieu of the net present value or benefit/‌cost ratio.  Cost-effectiveness is simply the amount of money invested divided by the benefit in crash reduction.  It is expressed as the cost for crash avoided with a certain countermeasure.  In this case, the countermeasure with the lowest value is ranked first.

A cost-effectiveness Index can be calculated as follows:

Cost-Effective Index = PVC/AR

Where:

PVC = Present value of project cost; and

AR = Total crash reduction.

The present value of the project cost is calculated in the same manner as in benefit/‌cost analysis.  This is a simple and quick method which provides a general sense of a project’s value and can be used to compare other safety improvement projects.  However, this method does not account for value differences between reductions in fatal crashes as opposed to injury crashes, and whether a project is economically justified.

4.4 Prioritization Methods

Once alternative countermeasures or projects have been determined to be economically justified, the next step is to prioritize them for implementation.  Alternative countermeasures identified at one or several sites can be prioritized using ranking, incremental benefit/‌cost analysis, or optimization methods.  Ranking is the simplest of the methods presented and is best for making decisions on a limited number of sites.  While an incremental benefit/‌cost analysis allows the analyst to compare the economic effectiveness of one project against another, it does not consider budget constraints.  Optimization methods are best for prioritizing projects based on monetary constraints.

Ranking

Ranking is the simplest method for prioritizing countermeasures at a site or prioritizing projects across multiple sites.  Some economic effectiveness measures that can be used for ranking include:

Individually, these ranking measures will not help safety practitioners obtain the best return on investment.  For example, ranking the countermeasures based solely on the number of fatal and injury crashes reduced does not account for the cost of each countermeasure.  Additionally, the countermeasure with the least cost may not have as significant reduction in fatal and injury crashes compared to a slightly higher-cost project.  It is best to account for multiple measures when ranking countermeasures such as using the net present value or cost-effectiveness methods.

Net Present Value

The following is an example using the net present value to rank four alternative countermeasures to improve safety at a site.  The present value of the benefits and costs of each alternative are provided in the following table.

Alternative Countermeasure

Present Value
of Benefits

Present Value
of Costs

Net Present
Value

Alternative
Rank

A

$1,800,268

$500,000

$1,300,268

3

B

$3,255,892

$1,200,000

$2,055,892

1

C

$3,958,768

$2,100,000

$1,858,768

2

D

$2,566,476

$1,270,000

$1,296,476

4

For Alternative A, the net present value is calculated:

NPV = $1,800,268-$500,000 = $1,300,268

This same step is repeated for the other three countermeasure alternatives, which are then ranked based on their net present value.  As shown, all four alternatives are economically justified with a net present value greater than zero.  However, Alternative B has the greatest net present value for this site based on this method.

Cost-Effectiveness Index

The following is an example of using the cost-effective index to rank alternative countermeasures, given the present value of the costs and the total crash reduction.

Alternative Countermeasure

Present Value
of Costs

Total Accident Reduction

Cost-Effective Index

Alternative
Rank

A

$500,000

43

11,628

1

B

$1,200,000

63

19,048

3

C

$2,100,000

70

30,000

4

D

$1,270,000

73

17,397

2

For Alternative A, the cost-effective index is calculated:

Cost-Effective Index = 500,000/43 = 11,628

With this method, the lowest index is ranked first.  The cost-effective index is calculated for the remaining alternatives as shown in the table, and Alternative A is ranked first, since it has the lowest cost associated with each crash reduction.

The above example simply used the number of crashes.  This method also could be used with Equivalent Property Damage Only (EPDO) crash numbers and has the advantage of taking severity into account.

Incremental Benefit/Cost Analysis

The benefit/cost ratios of the individual safety improvement projects are the starting point for an incremental benefit/‌cost analysis.  The process for conducting an incremental benefit/‌cost analysis is as follows:

  1. Rank the individual projects with a BCR greater than 1.0 in increasing order based on cost, with the smallest cost listed first.
  2. Starting from the top of the list, calculate the difference between the first and second project’s benefits, and then calculate the difference between the first and second project’s costs.  Calculate an incremental benefit/‌cost ratio by dividing the difference in benefits of the two projects by the difference in costs of the two projects.
  3. If the incremental BCR is greater than 1.0, the project with the higher cost is ranked higher and compared with the next project on the list, meaning the magnitude of the benefits of the higher-cost project outweighs the higher cost.  However, if the incremental BCR is less than 1.0, the project with the lower cost is ranked higher and compared with the next project on the list.
  4. Repeat this process for the entire list.  The best economic investment is the project selected in the last pairing.
  5. To produce a ranking of projects, repeat the entire process for the remaining unranked projects to determine the project with the next best economic investment until all of the projects are ranked.

In instances where two projects have the same cost, the project with the greater benefit should be selected.

Example

The following is an example application using the incremental benefit/‌cost analysis, using the same four alternative countermeasures.

Alternative Countermeasure

Present Value
of Benefits

Present Value
of Costs

Benefit/Cost
Ratio

A

$1,800,268

$500,000

3.60

B

$3,255,892

$1,200,000

2.71

D

$2,566,476

$1,270,000

2.02

C

$3,958,768

$2,100,000

1.89

  1. The first step is to rank the alternatives by the present value of the costs, from lowest to highest, which already has been done in the table.

  2. The incremental difference is calculated for the benefits and the costs for Alternatives A and B.

    • Incremental Benefits = $3,225,892-$1,800,268 = $1,455,625
    • Incremental Costs = $1,200,000-$500,000 = $700,000
    • Incremental B/C = $1,455,625/$700,000 = 2.08

  3. Since the incremental benefit/cost ratio is greater than 1.0, Alternative B should be compared to Alternative D.

  4. The incremental benefit/cost ratio is calculated for Alternatives B and D:

    • Since the incremental benefits are negative, Alternative B should be compared to Alternative C.
    • Incremental B/C = $702,845/$900,000 = 0.78
    • Since the incremental BCR is less than one, Alternative B is then ranked first.

  5. This same process is continued until all of the alternatives have been ranked.  The ranking results are shown in the following table.

Alternative Countermeasure

Benefit/Cost Ratio

Alternative Rank

A

3.60

3

B

2.71

1

C

1.89

2

D

2.02

4

Notice although Alternative A had the highest individual project benefit/‌cost ratio, it was ranked third.  In addition, it is also important to notice the alternative rankings are the same using the net present value method or the incremental benefit/‌cost analysis.

An incremental benefit/‌cost analysis provides a basis of comparison of the benefits of a project for the dollars invested.  However to take monetary constraints into consideration, optimization methods must be used.

Optimization Methods

Optimization methods take into account certain constraints when prioritizing projects.  Linear programming, integer programming, and dynamic programming are optimization methods consistent with an incremental benefits/‌cost analysis, but they also account for budget constraints in the development of the project list.  (These optimization methods are more likely to be incorporated into a software package than directly applied and will not be addressed further in this manual.)  Multi-objective resource allocation is another optimization method which incorporates nonmonetary elements, including decision factors not related to safety, into the prioritization process.

Software programs are available to assist in the selection and ranking of countermeasures.  SafetyAnalyst includes economic appraisal and priority ranking tools.  The economic appraisal tool calculates the benefit/‌cost ratio and other metrics for a set of countermeasures.  The priority ranking tool provides a priority ranking of sites and proposed improvement projects based on the benefit and cost estimates determined by the economic appraisal tool.  The priority-ranking tool also has the ability to determine an optimal set of projects to maximize safety benefits.

The prioritization methods presented in this unit are consistent with those in the HSM.  The HSM provides additional resources and examples of many of these methods.
So far this unit has focused on prioritizing hot spot improvements.  The next section will address systemic improvements and balancing between the two types.

4.5 Approaches Addressing Current and Future Safety Problems

As discussed in Unit 2, transportation safety practitioners are focusing more on systemic improvements using countermeasures proven to be successful rather than on a particular location with an identified problem or “hot spot.”  For example, some states have identified systemic problems (e.g., high occurrence of run-off-road, median crossover crashes, etc.) through crash data analysis, and are implementing cable median barrier and rumble strips on roads even if no safety problem has been identified at a particular location.  These are proven effective countermeasures and it is more efficient to add these road improvements while addressing infrastructure functions, such as resurfacing, routine maintenance, and construction on a systemic basis.  These actions may prevent or minimize the severity of future crashes even though a road segment or intersection may not have yet had a safety problem resulting in crashes.

Embedding these improvements into state or local policy leaves a lasting legacy for safety.  A historical example is pavement marking, which at one point was not a standard installation on highway projects.  Today, a highway agency would not consider opening a new section of highway without striping.  In at least one state, rumble strips have been given this same status.  On any overlay project on a major highway, rumble strips are a required addition, regardless of the road’s crash history.  The addition of rumble strips has simply replaced traditional striping as the state standard for pavement marking on its highways.  The safety treatment has been institutionalized, and the benefit of this policy change will outlast any specific safety project or program.

Since systemic improvements are intended to be implemented on several miles of roadway or at several locations, they do not necessarily have to be prioritized by location per se; however, it may be necessary to determine a point of departure for implementing these improvements.  An agency might consider incorporating improvements into maintenance/‌design practices (e.g., all rural roads projects include the safety edge or shoulder rumble strips/‌stripes during paving projects), or at high risk locations that have:

When developing their HSIP, an additional issue that states will need to address is how to balance systemic improvements versus hot spot improvements.

Striking a Balance

No prescriptive method exists for determining the proportion of HSIP projects that should be systemic improvements versus hot spot improvements.  While the majority of fatal crashes tend to occur in rural areas, urban areas comprise a much greater proportion of injury and property damage only (PDO) crashes.  Due to the inherent differences in the two area types, the focus of the improvements will vary.  Although improvements in rural areas typically focus more on systemic improvements, and urban areas typically focus more on hot spot locations, both types of improvements can be used in either area type.  However, since rural areas are associated with a lower crash density (i.e., crashes spread over many miles of roads), systemic improvements are more likely to address sites with potential for safety improvement that might not be identified through a crash analysis.  The appropriate balance between systemic and hot spot improvements should be determined by each state.  For example, some states set aside a portion of their HSIP funds to implement systemic improvements.

4.6 Summary

States may select a combination of project prioritization strategies and typically consult with other agencies (e.g., DOT district or regional offices, FHWA Division Safety staff) during this process.  A balance is needed in the HSIP among hot spot, segment/‌corridor, and systemic improvements to ensure the best mix of safety solutions is identified and implemented to reduce fatalities and serious injuries.

Once the prioritized projects are included in the HSIP, the next step is implementation.  Implementation is addressed in the next unit.

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