Development of a methodology for evaluating the economic impact of rural public transportation in Georgia counties

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OEPARTMENTALRESEARCH GOOT RESEARCH PROJECT NO. 9309
FINAL REPORT
GEORGIA DEPARTMENT .OF TRANSPORTATION

DEVELOP, MENT

OF

A

METHODOLOGY ~

FOR

EVALUATING THE ECONOMIC IMPACT OF

\

\

RURAL PUBLIC TRANSPORTATION IN

GEORGIA COUNTIES

OFFICE OF MATERIALS & RESEARCH
RESEARCH AND DEVELOPMENT BRANCH

TECHNICAL REPORT STANDARD TITLE PAGE

1. Report No. FHWA-GA-99-9309

2. Government Accession No.

4. Title Development of a Methodology to Evaluate the Economic Impact of Rural Public Transportation on Georgia Counties

7. Author(s) Dr. Michael Meyer, P.E. Dr. ArthurC. Nelson Zhong-Ren Peng

3. Recipient's Catalog No.
5. Report Date April 1999
6. Performing Organization Code 8. Performing Organ. Report No.:
9309

9. Performing Organization Name and Address Georgia Institute of Technology School of Civil and Environmental Engineering Atlanta, Georgia 30032-0355

10. Work Unit No. 11. Contractor Grant No.

12. Sponsoring Agency Name and Address Georgia Department of Transportation No.2 Capitol Square Atlanta, Georgia 30334

13. Type of Report and Period Covered Final 1993-1996
14. Sponsoring Agency Code

15. Supplementary Notes Prepared in cooperation with the U.S. Department of Transportation Federal Highway Administration.
16. Abstract The Georgia DOT administers the Rural Public Transportation Program in Georgia, which supports the operation of public mo-
bility services in counties and/or cities with populations under 50,000. The availability of transportation stimulates the economy, facilitating access and activity in local businesses. Research Project 9309 is an extension of a previous study performed by the Middle Georgia Regional Development Center, in which the multiplier effect of rural public transportation was examined.
In this study, a conceptual framework was developed that identified the key factors linking increased public mobility in rural areas and local economic activity. Alternative methods of calculating the economic impact of public investments were investigated, and special attention was given to the multiplier effect of such investments. A test methodology was then developed to be used by local governments in estimating the benefits derived from public transportation, and instructions were developed which show local officials how to implement the methodology. The methodology can now be tested to gauge its utility.

17. Key Words Public transportation,rural economies, rural transportation

19. Security Classif. (of this report) Unclassified
Form DOT 1700.7 (8-60 )

20. Security classif. (of this page) Unclassified

18. Distribution Statement No Restrictions

21. No. of Pages 73

22. Price

GEORGIA DEPARTMENT OF TRANSPORTATION OFFICE OF MATERIALS AND RESEARCH
Final Report Research Project 9309
Development of a Methodology for Evaluating the Economic Impact of Rural Public Transportation in Georgia Counties
Professor Michael Meyer Professor Chris Nelson Dr. Zhong-Ren Peng Georgia Institute of Technology
April 1999
The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the Georgia Department of Transportation or the Federal Highway Administration. This report does not constitute a standard, specification, or regulation.

TABLE OF CONTENTS

Section

Executl.ve Summary

...
111

List of Tables

, iv

List of Figures

v

1.0 Introduction

1

2.0 Objectives and Research Plan

3

3.0 Literature Relating to Rural Economic Activity and Transportation

Investment

6

4.0 Development of the Methodology

11

4.1 Overview

11

4.2 Benefit/Cost Methodology

20

4.2.1 Perspectives on Impacts in the Analysis of Rural

20

Transit Systems

4.3 Benefit Analysis of Rural Transit Service

.23

4.3.1 Benefit Analysis of Transit Service to the Elderly

26

4.3.2 Fiscal Revenue Benefits of Elderly Transit Riders

.31

4.3.3 Benefit Analysis of Transit Work Trips

31

4.4 Cost Analysis of Rural Transit Service

.33

4.5 Benefit/Cost Analysis of Providing Rural Transit Service

.34

4.5.1 Marginal Benefit/Cost Analysis

.36

5.0 Users Guide

38

6.0 Conclusions

48

7.0 References

49

Appendices A: Bibliography and Other References B. County Classification System Used in the Methodology

11

! \
EXECUTIVE SUMMARY
The Georgia DOT administers the Rural Public Transportation Program in Georgia, which supports the operation of public mobility services in counties and/or cities with populations under 50,000. The availability of transportation stimulates the economy, facilitating access and activity in local businesses. Research Project 9309 is an extension of a previous study performed by the Middle Georgia Regional Development Center, wherein the multiplier effect of rural public transportation on the economies of counties and/or cities in Georgia with populations under 50,000 was evaluated.
In this study, a conceptual framework was developed that identified the key factors linking increased public mobility in rural areas and local economic activity. Alternative methods of calculating the economic impact of public investments were investigated, and special attention was given to the multiplier effect of such investments. The benefit-cost ratio method was selected as the most appropriate method, primarily due to its adaptability to local economies.
A test methodology was then developed using this method for use by local governments in estimating the benefits derived from public transportation. Benefit/cost ratios for the overall economic benefits and fiscal revenue benefits realized from local transit subsidies were obtained. Both classes of benefits were derived from a combination of senior citizen and commuter transit trips. Also, the benefit/cost ratios were developed with and without federal subsidization considered. Three of the four ratios obtained exceeded 2: 1.
Finally, instructions were developed which show local officials how to implement the methodology. Section 5 of this report contains these instructions and sample calculations. The methodology can now be tested to gauge its utility.
111

LIST OF TABLES

TABLE 1. Public Investment Methodology and Economic Indicators for Rural Economic
Development 2. Benefit/Cost Analysis Comparison to Other Methodologies 3. Characteristics of Georgia Rural Transit Riders 4. Economic and Fiscal Benefit/Cost Analysis for Rural Georgia Counties 5. Economic Benefits from Elderly Riders 6. Fiscal Revenue Benefits from Elderly Riders 7. Economic Benefits of Transit Work Trips 8. Fiscal Revenue Benefits of Transit Work Trips 9. Total Economic Benefit/Cost Analysis 10. Total Fiscal Revenue/Cost Analysis 11. Economic and Fiscal Revenue Benefit/Cost Analysis for Selected
Georgia Counties (With Federal Subsidy) 12. Economic and Fiscal Revenue Benefit/Cost Analysis for Selected
Georgia Counties (Without Federal Subsidy)

PAGE 12
21 .23 .33 41 .42 43 .43 .44 45
.46
.47

iv

LIST OF FIGURES
FIGURE 1. Illustration of Marginal Benefit and Marginal Cost 2. Georgia County Classification

PAGE 36 40

v

DEVELOPMENT OF A METHODOLOGY FOR EVALUATING THE ECONOMIC IMPACT OF RURAL PUBLIC TRANSPORTATION IN GEORGIA COUNTIES
1.0 INTRODUCTION Investment in transportation infrastructure and services is undertaken for many reasons.
Perhaps the most important reason, however, is to support and enhance the economic growth of a region. Numerous studies have been undertaken on the likely economic impact of highway investment, and a smaller, but still substantial, number of studies have been undertaken on the economic impact of rail transit systems. However, very few studies have examined the economic impact of bus transit systems, and even fewer the economic impact of rural bus systems. Yet, with the emphasis of ISTEA on better linking transportation investment to a broader perspective of community or regional wellbeing, there is an important need to have I) substantive knowledge on what economic impacts can be attributed to rural public transportation systems, and 2) practical tools that can be used by local governments to estimate the benefits of public transportation operations.
Investment in the transportation system is a critical element of a state's strategy to enhance economic development and promote the quality of life of its citizens. In recent years, substantial interest has developed in using transportation investment in rural areas to provide the necessary public services that will improve rural life. With limited resources, however, such investment decisions must be made with the best possible information on the likdy benefits and costs associated with different strategies. In Georgia, where numerous transportation providers offer transit services and where fiscal constraints have caused county officials to examine the benefits

of such services, this information is especially critical. The purpose of this research project was to develop a methodology that could be used by local
officials to evaluate the economic impact of rural public transportation services, namely buses, vans, and taxi vouchers, in Georgia. This methodology was to be designed to be easily understood by these officials and to rely on data and assumptions directly related to the Georgia context. This methodology also targeted local officials' understanding of the relationship between transit service and economic impact in the county. This research is one of the few research projects in the country which emphasized rural transit services, not to mention the link with economic development. Where the term "transit" is used in the context of "rural transit" or "rural public transit," it is synonymous with rural public transportation. It should also be noted that "rural" counties discussed in this report include counties with a population classification of "exurban", as per Nelson et al. in Exurban industrialization. Further details on the characteristics of exurban counties are given in Appendix B of this report.
This report is composed of six sections. Section 2 provides an overview of the research design and the approach toward developing the benefit and cost methodology. Section 3 is a summary of the literature review that was undertaken. This review was very broad in scope, given the initial paucity of literature on the specific topic. Section 4 presents the methodology and the underlying principles upon which it is based. Section 5 provides instructions for use of the methodology, and Section 6 concludes the report. The appendix includes an extensive reference list of literature relating to the general topic of economic development and service provision, both in the transportation sector and in other areas as well.
2

2.0 OBJECTIVES AND RESEARCH PLAN The objectives of this research project included the following items:
1. Develop a conceptualframework that helps identify the key factors that link increased public mobility in rural areas and local economic activity.
This objective provides the basic point of departure for understanding the relationships that exist between public mobility and economic activity. The framework helps identify the key factors or variables that are important in both rural public transit and rural economies, and the cause-effect relationships between these variables. Before any methodology can be developed, the principles upon which the methodology will be based must be known. Also important in this framework is a preliminary understanding of the type of data that might be necessary to implement a proposed methodology.
2. Investigate and assess alternative methods to calculate the economic impact ofpublic investments, with special attention given to the multiplier effect ofsuch investments.
There are many different ways of calculating the economic impact of public investments. Two of the most notable approaches, for example, are linear regression models and input/output models. Achieving this objective required an examination of the different types of methods used in the U.S. and the development of criteria for assessing their usefulness for this project.
3. Develop a methodology that can be used by state and local officials to calculate the economic impact ofrural public transportation systems.
This was the primary objective of this research. Included in this objective was the need to structure the method in such a way that it is usable and understandable to those who will eventually use it. The actual development of the methodology was based on an understanding of the causal relationships that exist between key variables and the types of data that are available to
3

local officials and practitioners.
4. Develop instructional materials that can be used to guide local areas on implementation of the methodology.
An important ingredient in the success of these efforts was having well-written and understandable instructions on how to use the methods. The importance of successfully disseminating the proposed methodology suggested that special efforts be undertaken to train potential users.
The following tasks were undertaken to achieve the objectives of this research.
Task 1: Conduct a literature search on the relationship between public investment in rural areas and economic impact, with special emphasis given to identifyingfactors that could be most sensitive to use ofpublic transportation investment.
The search of the economic and transportation literature focused on the descriptors of economic impact that have been used in previous studies. These descriptors or variables included such things as retail sales, employment or jobs, and local tax receipts. This literature search was conducted through the use ofthe computerized library search facilities at Georgia Tech.
Task 2: Conduct a survey ofother states to search for rural economic studies and the role of public works investment.
This task focused on finding states that have conducted studies on the impact of public investment on rural economies, and in particular, on the role of transportation investment. The results of this survey were critical to structuring the proposed research. This survey was a targeted survey aimed at states that have rural characteristics similar to Georgia. A telephone survey was used to gather the desired information.
4

Task 3: Investigate and assess methodologies that could be used to estimate economic impacVmultiplier effects on public investments.
A set of evaluation criteria were used to assess the appropriateness and usability of different methodologies found in the literature. These criteria included such things as incorporation of key factors found in Task 1, level of data requirements, ease of use, relationship to public transit investments, etc. Other criteria included sensitivity to different scales of analyses, data availability, ease of local implementation, and interpretability of results.
Task 4: Develop a methodology to be used to estimate economic impacts ofruralpublic transit investment.
A number of methodologies were reviewed, including benefit-cost, and the general methodological framework was selected. Benefits and costs were calibrated to differentiate between public and private benefits and costs. Public benefits included fiscal improvement, while private benefits included income and employment Public costs included fiscal support, which were further divided into total federal, state, and local contributions. Private costs are not directly calculable except as opportunity costs of fiscal contributions or foregone savings in alternative modes.
Task 5: Develop instructions and guidesfor the methodology. This task resulted in instructions and guidance material that can help officials learn to use the
methodology. These materials were written in a straightforward manner, and include step-bystep instructions on all computations in the methodology.
Task 6: Hold a training course on using the methodology. Although the products of Task 5 provided a good point of departure for users of the
5

methodology, it is important to provide hands-on training. This task developed and held a training course on the use of the methodology of the guidance materials. The course was conducted at the Georgia Institute of Technology in March, 1996. The course summarized the results of the research project. The proposed methodology was explained and demonstrated, and introductory material was presented on the conceptual framework that guided the research. Evidence that exists in the literature and in practice that suggests the causal relationships between economic activity and public transportation investment were also discussed.
3.0 LITERATURE RELATING TO RURAL ECONOMIC ACTIVITY AND TRANSPORTATION INVESTMENT
Attempts have been made for many years to quantify the links between public expenditures on transportation and economic development. While extensive literature exists on rural highway expenditures, there is a lack of defined methodology for determining the economic impacts of rural public transportation. Additionally, attempts to expand highway-based methodologies to cover public transit expenditures have not been successful.
The primary method of analysis in most studies on rural public transportation has been the case study. These studies have typically shown that the introduction of public transportation in rural areas has led to a slight increase in employment, while enhancing mobility for a sizable portion of residents. However, methodologies for quantifying a "multiplier" effect for public expenditures on rural transit have not been well developed. For instance, in The Economic Impact ofRural Public Transportation, the Middle Georgia Regional Development Center presented an analysis of the public transportation/economic link in Crawford, Greene, Hall, and Peach Counties. A rider survey focusing on service need and rider expenditures suggested that
6

the transit systems in larger or "wealthier" counties may have the opportunity for a more profound economic impact on the region. However, as is the case for a majority of the literature, no methodology for actually making a link was presented or assumed.
Additionally, the Community Transportation Association of America, which provides guidance to rural areas under the Rural Technical Assistance Program, has written several articles highlighting the "success stories" on rural public transportation implementation. Once again, the case studies do not prove an actual linkage.
Some success has been made in developing linkages and multipliers for expenditures on services closely related to rural public transportation. In Transportation and Economic Development ofCoastal Areas in the Pacific Northwest, Sullivan presented an input-output methodology for estimating direct and indirect economic benefits from transportation investment. The methodology focused on types of business development most likely to occur in the coastal regions of the western United States. Direct user benefits were defined in terms of accident reduction and travel time improvements. Indirect benefits were estimated using an elasticity-based method to look at the immediate and permanent impacts of an improvement. Overall, the authors found that the "multipliers" for transportation investments in these rural areas are between 1.0 and 2.0.
Also, in Methodology for Estimating Impact ofTransportation Infrastructure on Business Location in Rural Northwest Communities, TransNow investigated economic development in terms of factors related to business location, including transportation. The authors suggested that the probability of a business choosing to locate in a specific location depends on whether this is a single establishment firm (SEF) or branch firm. For the SEF, the authors developed a dichotomous choice model under the assumption that the community attracts the specific business. The authors also suggested the use of a conditional logic model for the situation of a business choosing a
7

location, rather than a location attracting a business. One of the most comprehensive analyses of this issue was presented in Economic Benefits of
Public Transit by the American Public Transit Association (APTA). This paper suggested several categories of potential economic benefits of rural public transportation investment including attraction of new business, attraction of related services and supplies, increased property values, increased retail trade and employment, etc. Based upon urban experience with bus systems, the report suggested the employment impact of capital expenditures was about 4,000 direct jobs and 5,600 indirect jobs per $100 million invested.
APTA cited two methods for performing a benefit-cost analysis for rural transportation focusing on intercity busing. The first method, developed in North Carolina, is based on the assumption of consumer surplus as the major component of user benefit. This surplus is defined as the difference in benefits between what a consumer now pays and what they are willing to pay. Net user benefit is calculated by the equation below:

NB=[(N)(t)(TA + FA-T B-F B]+[(1I2)(N)(1-t)(TA + T B-FA-F B)]+[(N)(l-T)(FB)]-[BC]

where:

NB = net benefit

T = time cost for each mode

N = # of passengers using service

t = % of trips transferable to auto

F = fares, or user cost for each mode

BC = bus operating cost

1/2 = reflects straight line demand curve assumption and loss of surplus

The second method developed in Wisconsin is based on disutility value. A value which considers money, convenience, and time factors is first calculated for a bus trip. This value is compared to a disutility value for trips taken by car. The equation for this method is as follows:

8

where:
DUijm = disutility of travel between points i and j using mode m
IVjjm = in-vehicle time for mode m between points i and j OVijm = out-of-vehicle time for mode m between points i and j
CTjjm = travel cost for mode m between points i and j
c\ = out-of-vehicle time multiplier (represents inconvenience of waiting) C2= value of time
C3 = mode bias factor
The authors point out that the method is useful for analyzing alternative bus routes. However, it only accounts for transportation costs.
More literature does exist on economic impacts of highway investments in rural areas. For instance, in Investigation ofthe Relationship Between Highway Infrastructure and Economic Development in Indiana, Sinha presented two models to explain changes in employment or wage income in various economic sectors. Both models used regression analysis to find a relationship between a vector of factors and economic change at the county level. Sinha found that highway mileage was positively related to growth in total industry and service sectors, multilane highway mileage had a much greater effect than overall highway mileage, and highway expenditures had a negative association with most economic measures.
In a review of previous studies, Sinha mentioned the following methodologies for estimating economic impacts of highway investment:
Regression analysis with time-series and cross-sectional (lata between 1957 and 1982 . was used for all counties in Minnesota;
Regression analysis using cross-section data and lagged variables was used in Georgia;
9

Factor and cluster analyses were used to group counties in North Carolina according to various economic'and transportation factors.
In reviewing the state-of-the-practice in assessing economic impacts of public transit investment, a recurring theme throughout the literature is that transportation infrastructure is just one consideration in the complex world of economic development. The relationships currently developed suggest that the strongest links between transportation and economic development are in terms of magnitude of infrastructure (such as lane-miles of multilane highway) rather than incremental investment (such as impact of$1 invested in public transit).
In Transportation and Economic Development-1990, Hartgen, et al. used factor analysis to determine the importance of highway transportation in manufacturing siting decisions in North Carolina. They found that an extensive network of four-lane roads is only a moderate factor in future incremental invp<;:tment decisions for husinesses. In the same document, Forkenbrock concluded that good transportation facilities are not enough to ensure economic development. More importantly, the area must be able to attract production, labor, capital, and lJ1aterials which are primarily influenced by other factors.
Additionally, in Impacts ofTransportation on Regional Development, Wilson, Stevens, and Holyoke investigated economic development in terms of industrial location decisions in the Atlantic region of Canada. They utilized a location Factor Preference Index (FPI) model with survey data input to develop factor importance. They found that of all public expenditures to enhance dev~lopment, transportation was only the sixth most impor-.ant out of nine.
The extent of the literature reviewed is shown in Appendix A, which is divided into several sections: Bibliography, General Economic Impact of Public Spending Literature, Multipliers in
10

Regional Economic Impact Analysis Literature, Economic Impact of Services Literature, and Transportation Economic Impacts Literature.
4.0 DEVELOPMENT OF THE METHODOLOGY 4.1 Overview Table 1 illustrates some of the types of methods that were found in the literature. This table
focuses on four items based on each reference reviewed. First, the methodology section provides a procedure and theoretical approach to identify benefits and costs of transportation investment and economic impacts of investments, which in turn can provide to a decision-maker the basic framework for evaluation of transportation investment projects. The next item is the specific transportation mode each reference focuses on. Although a general approach to analyze the economic impacts of transportation investment is similar to one another, an analysis method may be changed according to the different transportation mode.
The third item is the economic indicators. This column provides different types of economic effects indicating the economic viability of the specific region. These are categorized into direct, indirect, and multiplier effects. These three categories of economic indicators, however, may include different items based on the various analysis perspectives. The final column explains each reference's basic concept on economic development and transportation investment and others which should be notified. Ultimately, this table can be used as a reference for the effects of public transit in investment on rural economic development while providing the general concepts and methodology of economic development and transportation investment. Table 1 is shown on pages 12 to 19. Discussion continues in Section 4.2 on page 20.
11

Table t: Public Investment Methodology and Economic Indicators for Rural Economic Development

Article
(I) Framework for Classifying & Evaluating Econ."lmpacts . (TRU 1274, 1990)

TR Mode Hwy. Mode

(2) Econ. Impacts of Transil on ClUes (fRR 1274,1990)

Transit (rapid transit and fixed route bus mode)

Economic Indicators

i) 3 Iypes of impacls:

- Qi.rm: reslills of econ. activities carried

oul on site in the conslruction & operation of

an improvemenl

(e.g.) employmenl. taxes paid, purchasing of

goods & services
- lrulirl: derive from off-sHe econ

activities associated with production of

intermediate goods & services required for

the conslruction & operation

(e.g.) services provided by aggregale, asphalt,

steel. etc.

. ~: mulliplier effects of the two

ahove.

(e.g.) Increases in income due to direcl,

indirect impacts, BBs increase, & their

purchasing aClivities conlrihute 10 further

changes in produclion & corresponding

changes in olher impaci variahles.

ii) tolal econ. impacts are the sum of Ihe

direct, indirect, and induced impacts.

(see below for details)

.

i) 3 major econ. benefit indicators:

- increase in property value adj. 10 the

Iransil line

- Increase in dev. projects (bldg. permits

and visual inspection) along the transit line

- changes in business sales adj. to transit

lines

ii) If Ihese indicators measured are increased,

Ihen transit benefits the local economy

iii) However, one major problem is its

difficulty in quantitalively measuring the

indicators.

Studv Area
No specific geographical area is indicaled

others
i) Din. h/w econ. impacls & U-bcnefit:
- U-benefit: measured in terms of time savings, savings from avoidance of delay, elc.
- Econ. Impact.: secondary effects of cap. expendilures : income, emplo....ment. production, lax revenues, & resource consumption

Major downtown

i) Olher factors

area are focused

affecting econ. dev. in

i) Atlanta, GA:

conjunction with

selected as a

Iransit investment:

representative of

- demand for new

newer city with

office spaces or

existing rail system residential areas

(MARTA)

- healthy overall

ii) Boston. MA:

economy

selected as a

- land availability

representative of older - favorable land use

city with existing rail policy

system (MBTA)

- construclion liming

iii) Dallas, TX:

selccted as a

representative of a

newew city
considering building a.

new transit system

iv) Hanford. CONN:

selccted as

arepresentative of a

smaller city with bus-

only transit system

Table t, cont'd

(3) Framework Fixed-

No indicators arc specified.

Suhject nrea is not

for Analyzin~ Guideway

specified

the Impacts... Transit

(TRR 1274,

1990)

(4) Evaluation Transil

i)Direct effect of Iransit inv.:

Analysis is mainly

of Econ. & Dev. especially

- Land. lahor. matcrials, ctc. acquired to concent ratcd on large

Impacts ...

rapid Iransit construct and operate the systcm.

urhan areas hut no

(TRR 820)

mode

- Passenger travellhat takes place on the specific area is

system (i.e. user-benefits).

designated

ii) Indirect effects:

- Econ. impact: employment. income. retail

sales. & other changes in private market

activities.

- Dev. Impact: physical & spatial effects

(land use impacts) hrought ahoul hy the

construction and operation of the transit

system.

(5) Estimating Transit mode Construction expenditure, operation &

Suhject area of Ihe

Econ. & Dev.

maintenance cost. vs. their gross impacts and study is focused on

......
Vol

Impacts of

joh creation

urbanized area

Transit

(Seattle Metropolilan

Investment

area)

(TRR 1046)

(6) Broome

Bus (Regular

Urbanized area is

focused on the

County Bus Schedule)

Main analysis area feasibility of a new

Transit Study:

(Broome County. NY transit system in a

Evaluation,

- Population: 165.(00) rural area, focus of

Analysis and

report was not so

Rommendatlon

much on the economic

s

indicators

(7) Alternative Branch rail Grain revenues to farmers and elevators,

Rural area is a suhject

Investments In lines and road transport cost for delivery of fertilizer,

analysis arca

the Rural

investment household travel costs for shopping. etc., road

Branch and

allernatives maintenance and safety costs and grain

County Road

elevator investment costs

Svstems

Table 1, cont'd

(ll)
Methodolo~y
for Estilliatin~ Impact of Transportation Infrastructure on Business Location in Rural Northwest Communities

Firm Location Methodology

Non-limited-

SEF - Single Establishment Firm

access paved

estimates transportation infrastructure impact roads

on location of new business activity

(BPj)=Birth potential of location j

Limited

Poisson regression model

access paved

roads

Branch Plant Entry

based on the premise that the firm's expected Rail lines

profits are affected by location

nj = F(Xj)+j

Airlines

nj = profit in location j Xj = set of relevant characteristics

Nearest metro area

Under the assumption that the disturbance follows a Weibull distribution P[Yi=jl = exp!3' Xj!Lexp/3'Xk P[Yi=jl = probability that firm i will locate in SMSA j Xj = matrix of observable characteristics The use of conditional Logit models are appropriate when the choice set contains multiple, unordered alternatives

Highway access
Shipping access
Total road miles at location

Factor price indicators (energy priccs and construction prices), Labor market characteristics (Inbor force participation rates and rates of union activity)
Not significant to industry location Wage rates, farm crop value, water rates, median home value. per capita personal income. technical expertise (measured by number of engineers' in the location)

Rural northwest communities in are focused

Dichotomous Choice Framework - investigates the effects of transportation costs and services on the location of new manufacturing plants in small communities Ordinary Least Squares (OLS) regression techniques to estimate model NBj=~ aij Xij +Lk /3kj Zkj + j NBj=l. if community j attracted new
manufacturing plant and 0 otherwise Xj contains ksocio-economic attributes for
the jth community

General Qualitative Response Model - including all the factors either for dichotomous or multiple choice estimation

NBij = f(Zj. Aj. Ej. Tj. Sj. Fj)+j NBij = dichotomous or multiple choice dummy Zj = Vector of location-specific economic factors Aj = Agglomeration factors Ej = Energy prices Tj = Transportation infrastructure Sj = Social indicators Fi = Fiscal indicators

Table 1, cont'd

(9) Road Investment to Foster Local Econ. Dev. (1990)

Case of Iowa's RISE (Revitalize Iowa's Sound Economy) Program: i) Mnin focus is to dislinguish efficient from
inefficient projects ii) Project henefits & costs
Br =Wr + (Pr - P*) - C
Sr: net henefits (income changes) Wr: the sum of the gains nnd losses to all
income recipienls other than the owners of the firm if it locales at the project sile ralher than al the best alternative site and if the road is improved Pr: net income that firm earns on its capital investment if it locates at the project site with the road improvement P*: opportunity costs C: investment costs (costs to the state of the road improvement)
B =W+ (P - P*)
B: net henefit if the firm locates at the site without the road improvement project
W: same as Wr if the road project is not undertaken
P: same as Pr with no road improvement iii) 3 conditions for undertaking a project
(see attached figure and table for details) I. Firm's profitability: compare the firm's
profitability at the site without the road improvement with the firm;s profits at its best alternative site (P*) p* - P> 0
2. Cost-effectiveness of road: transportation benefits of road improvement should justify its costs
= (Br-B) (wr-w) + (Pr-P) C > 0
3. Overall net benefits should be posiiive Br>O
iv) If these 3 conditions are not met, undertaking the road investment project cannot promote economic development

Road and Highwny

Income as a direct indicator Highway henefits & costs: - Benefits: reduction of lransportntion costs
such ns decrense in trnvellime. increase in safcly. nnd decrease in fuel costs, etc. - Costs: investment costs including lhe future maintenance and opernting cO.~ts
(sec atlached copy for empirical dalll and fidings)
-

This study includes mhnn and ntrnl areas hut prinwrily focused on rural nrens in Slnte oflown

i) Basic rule for road investment to facililnte local econ. dev. should he based I on "efficiency". ii) Justification of econ. de v.. in other words. is not joh creation hUI increases in income

Table 1, cont'd

(10) Public Sector Participation in Local Rail Service (1992)

Case of Illinois Stale Rail Plan i) Methodology for analying rail line project
proceeds in 2 phases. line viability and economic analysis ii) Line viability: addressing itself to whether the line makes a positive net contribution to the operations iii) Eeon. analysis composes of economic.
transportation. & public benefits I. Trans. benefits: costs that would be
saved by the investment. equal to the difference in trans. costs of affected traffic from origin to destination using the investment proposal and noinvestment option; the comparisons are usually comprosed of rail costs (the proposal) and truck cost (do-nothing option) 2. Economic benefits: retention of employment base and the benefits of creating new jobs at Ihe proposed investment center 3. Public benefits: the savings in governmental expenditures and Ihe reduction in other costs to the public; costs in this analysis are the net project costs which include capital & labor costs minus the salvage value of the project al the end of its life

Rai I tmnsit mode

No specific indicators are identificd
--

The decision determining which benefits tocount is tied to who paid for the project; that is. if the project is paid for through federal funds. then no transfer effects should be counted and only transportion benefits should be examined. However. if the project is financed by a community. the community will view economic transfers as a benefit. Transfer effect is an economic effect due to the movement of the industry to the other location.

Table 1, cont'd

(II) Transit- Costs and Benefits

Cedar Rapids

related Joint From the perspecti ve of transit, whatever Ground

Development in success the project has enjoyed is not

Transportation

Smaller Cities: particularly Inrge, compared to the amount of Ccnter:

An Appraisal of federal and local puhlic dollars devoted to it Fixcd routes

Opportunities (transit has incurred higher operating costs) Buses

and Practice

Taxis

Special

Services

for

hnndicappcd

and elderly

Greyhound

Trailways

Downtown Redevelopment (sec helow for empirical tlnta & findings)

Investment in the facility has had no real effect on the area's economy considering the large amount of federal investment
Had some effect on the encouragement of downtown redevelopment. whether this positive effect is worth $4 million and whether more beneficial puhlic investment projects could have been huilt instead are open questions

Davenport Ground Trnnsportation Center: Fixed routes Demand responsive Buses Greyhound Trailways
Fargo Ground Transportation Center: Fixed routes Demand responsive Buses Greyhound

Downtown Redevelopment (sec helow for empirical data & findings)
Downtown Redevelopment (see helow for empirical data & findings)

West Alahama Puhlic Trnnsportation Flexihle routes Demand Responsive

No Economic Indicators (just improved the transit system)

Study is center in smnll-sized urhnn nnd rural areas: i) Cedar Rapids, Iowa : urhan. population of 107.317 ii) Davenport. Iowa : urhan. population of IOO.OeKJ iii) Fargo, N. Dakota : rural. population of
61,000
iv) Demopolis. AL: rural. population of 7.000

specific ohjective to cvalunte the potential for transit-related joint development in smaller communities

(I) Article # I
a. Classification of Econ Impacts is hroken down as affecling the following nren (5) : Busincss & Ind.. Recreational. Tnx rcvenue. Regional & Communily. and Resources ( sec the nllached copy).

Table 1, cont'd

b. One example of hypothetical evaluation framework

Improvement Alternatives ($)

Publicly owned & managed

Pub. owned & Privately operated Other alt.

Improvement Cost:

constmction

maintenance

U-Benefits: lravr-I I,rn" ~avings

vch. operaling savings

accident savings
Ecan. Impacts: * I)

facility constmction

business growth

increase in land value

increase in jobs

tourism & recreation

Total Benefits & Impacts

Tax R:,;.':;n::::~
* I) needs to specIfy lor quantItative analySIS; unfortunately. no method for calculatIon IS found In the arllcle.
- This exam pIc is provided dcpending on method of transil ownership and management.

- Based on thc improvement alts. the elements of improvement cosl, U-benefits, and econ. impacts can be differently idcntified and selected.

- Another example of Improvement alts mat be based on servicc mileage & area: difference on how large area, how long route, and/or how often.

(2) Article # 5

a. Constmction expenditures: econ. impact of the project constmction phase

.......

- Categorize the actual capital cost - major investment (veh., guideway, stations. propulsion). TSM projects (HOY lanes. ramps. and signals). and other

0:>

capital'costs (buses. bases, park ant:l ride lots on other components of the transit system)

- Adjust to estimate the proportion of each capital expenditure category that would be incurred w/in the metro region (projcct area)

(magnitude of capital costs, particularly in major investment part. vary tremendously across the various alts).

- Thereforc. capital costs are modified by these percentages as an estimates of the actual cap. expo that would be made in materials & lahor.

- These annual capital exps. for each alt. are entcred into the" PSCOG STEP83 regional econometric model.

- STEPR3 MODEL calculates jobs. estimatcs total output gain. and provides an estimate of the multiplier; to he specific. direct expenditure

& johs. total expenditure & its multiplier. total jobs & its multiplier for each alt.

- total impacts & multipliers measured above are based on the assumption that all of the capital costs to be expended within the region

during the project years would be new funds granted from outside; however. this assumption connicts with actual situation (no more than 1/2 of the total

project costs would be covered by fcderal grants).

- Make a new assumption: no federal grants for no-build alt . 50% of the total capital costs would be covered by fedcral grants for 2nd & 3rd alts.

Additionally, it is assumed that the cap. exps. for materials within the region would generate some tax revenue. amounting to Rpercent on an assumed 50%

for materials.

- Re-mn the model based on the new assumption.

b. Dev. impact: use the DRAMIEMPAL urban activity model.

c. Empirical data & findings:
* Regional economic impact of capital expenditures (no local share assumption. 1984-2(00) - see next page

Table 1, cont'd

Expenditures a

Alternatives No Build Advance Tech. Busrrunnel Light Rail System a. Millions of 1983 dollars b. Thousands of job-years

Direct Regional ($) 159.4 554.2 980.1

Total Impacts ($) 326.8 1108.4 1989.6

Jobs b

Direct 1.9 6.8 11.8

Total 5.1 17.6 30.9

* Regional economic impact of capital expenditures with 100-50-50 local share assumption

Alternatives No Build Advance Tech. Busrrunnel Light Rail System . a. Millions of 1983 dollars b. Thousands of job-years

Expenditures a

Every- Within where Region

($)

($)

452.7 159.4

979.7 554.2

1462.2 980.1

Total Impacts ($) 583.9 397.2 996.6

Jobs b

Direct 1.9 6.8 11.8

Total -16.3 -0.4 6.3

(3) Article # II a. Cedar Rapids: Remove blight areas and strengthen tax base while improving transit system - $30 million of project cost including construction cost of office tower and housing complex - investment of $13 million for office tower, $3 million for housing complex. $7 million for puhlic library, and $il.S million for private development in seven block areas around Ground Transportation Center; as a result, increases in property value (not specific value an is indicated) h. Davenport: Cost of $5.6 million is invested for transit improvement c. Fargo: $4.7 million of project cost and $70 million of private investment in Fargo dowmtown area

4.2 Benefit/Cost Methodology Ofthe methodologies discussed above, economic benefit-cost analysis was chosen as the most appropriate general methodology. Benefit/cost analysis compares the anticipated benefits and costs of a proposed transportation project or system to determine its feasibility and the ratio (multiplier) of benefits to costs. Benefit/cost studies, for example, are required by the World Bank to determine whether investments in Third World transportation systems are positive and improve gross domestic product. The comparative advantages of benefit/cost analysis include:
High level of adaptability to local economy Relatively low sensitivity to different geographic scales of analysis Relatively high level of data availability at reasonable cost High level of ease of local implementation High level of interpretability of results
Table 2 on page 21 compares benefit-cost analysis with other methodologies to illustrate this point.
4.2.1 Perspectives on Impacts in the Analysis of Rural Transit Systems Impacts of rural transit systems can be viewed from several perspectives. They can be analyzed from the perspective of transit users (users impacts) or that of the transit providers (public impacts). From the viewpoint of transit providers, rural transit systems will impact overall economic development and fiscal revenue. Also, the economic and fiscal revenue impacts can be estimated at the federal, state, and local levels. Economic impact will vary with different perspectives.
20

Table 2: Benefit Cost Analysis Comparison To Other Methodologies

Methodology

Adaptability to Local Economy

Aggregate Models Inappropriate

N OuasiI-' Experimental
Analyses
Econometric Studies
.~
Input-Output Models
Firm Location Analyses
Benefit-Cost Studies

Low
Low Relatively Low
Moderate High

Sensitivity to Different Scales
of Analysis
Inappropriate

Data A vailabi/ity at Reasonable Cost
Inappropriate

Ease of Local Implementa tion

Interpretability of Results

Inappropriate

Inappropriate

Moderate

Relatively High

Low

Moderate

High High Relatively Low low

High Moderate Moderate Relatively High

Low Relatively Low Relatively low Relatively High

Moderate Moderate Moderate
High

Users Impacts Versus Public Impacts. There are two basic impacts of rural transit systems: the impact on individual transit users and the impact on public transit providers. The benefits to transit users refer to transportation consumers surplus, including increased accessibility, increased mobility, and income improvements. The costs to transit users include transit fare costs, travel time costs, or opportunity costs. Public impacts of rural transit include economic and non-economic benefits and costs. Economic benefits are the benefits to the economy provoked by changes in transportation system and subsequent changes in mobility and accessibility, involving overall economic benefits and fiscal revenue benefits. Non-economic benefits are those for which it may be difficult to assign a monetary value associated with rural transit service such as reductions in air pollution and other environmental benefits. Non-economic benefits also include those intangible benefits that defy direct measurement but which are real, such as allowing a rider to feel connected to the community in which they live because of access to places they would not otherwise frequent. This study focuses on the economic benefits and costs for the public providers of rural public transportation services rather than the service users. Overall Economic and Fiscal Revenue Benefits. Overall economic benefits refer to benefits to the economy as a whole provoked by changes in transportation systems. They include such benefits as value added in retail sales, service and housing, as well as their indirect and induced multiplier effects on other sectors of the local economy. Fiscal revenue benefits are fiscal revenues that are generated from local economic development (including taxes and user fees), fare revenues from transit users, and fiscal revenue transferred from the state and federal governments to the local government for transit service. Fiscal revenue benefits show fiscal revenue gained from economic development and measure the amount of revenue added to the
22

local governments. Public costs include fiscal support to provide transit services, including fixed costs, maintenance costs, and operation costs. These costs can be further divided into federal, state, and local contributions. The Scale of Economic Impacts: Economic impacts of rural transit services can be analyzed at different levels, i.e., national, state, and local levels. The resulting impacts will vary depending on different analytic scales. For example, one economic benefit of a rural transit system is transporting consumers from their homes to the shopping areas of a county. The county gains local retail sales, but those sales are merely diverted from other counties or states where those people may shop or to order by mail. Thus, the national economy may not benefit much from a local county transit system, but the local economy certainly improves. This study evaluates benefits and costs of rural transit systems from the perspective of local (county) government, recognizing that most of these benefits are merely pecuniary benefits, i.e., benefits shifting from one county to another rather than net benefits generating from the transit service. Although the transfer benefits may not be important for the national economy as a whole in the pure economic sense, they are very important to retain the vitality of rural economy and rural communities.

4.3 Benefit Analysis of Rural Transit Service Table 3 summarizes the characteristics of rural transit riders in Georgia.
Table 3. Characteristics of Georgia Rural Transit Riders

Total Trips

Elderly

Riders Disabled

Others

No. of Trips

1,565,790 798,226

175,534 592,030

Shares

51.0% 11.2% 37.8%

Source: 1994 County and CIty Data Book

Medical 185,134 11.8%

Work 140,437
9.0%

Trip Purpose Education Shopping

120,138 7.7%

383,960 24.5%

Social & Recreat. 218,141
13.9%

Other Purposes 517,980
33.1%

23

As shown in Table 3, most riders of public transit in rural counties of Georgia are elderly and disabled. There are only about 1.5 million rural transit trips per year, which is the equivalent of one trip per rural resident per year. Over half of riders are elderly with age over 65 years, and about 11 % are people with disabilities. There may be some overlap between the elderly and the disabled riders; some people with disability may also be the elderly, and vice versa. The aggregate data do not allow us to disentangle the two groups. Other riders account for only about 38% ofthe total ridership.
The trip purposes for rural transit riders are widely distributed among shopping, medical, social and recreation, work, school, and other unclassified trips. Among the identified trips, shopping is the most frequent trip, accounting for 25% of all trips, followed by social and recreation trips (14%), and medical trips (12%). The work and school trips are the least frequent trips, accounting for only 9% and 7.7%, respectively. The trip purposes cannot be distinguished by age group using the available data.
The data indicate that most rural transit riders are transit dependent. This is not unique to rural Georgia. Other studies also identified that rural transit users are mostly transportation disadvantaged, being elderly, physically disabled, and/or having no vehicle (Kidder, 1976).
Because most patrons of rural transit service are the elderly, the handicapped, and those without vehicles, this study focuses on the economic benefits of those dependent on transit. There are few data on the earnings and expenditures of the handicapped, and there is overlap betwee:l the elderly and the handicapped. Therefore, this study focuses on the economic benefits of the elderly riders. In addition, rural transit service is essential to workers without vehicles because there are few alternatives to them, notwithstanding they are a small portion of the rural worker force. Experience from rural transit providers reveals that most of these transit work trips
24

""..
are made by young workers. There is little overlap between the elderly riders and the work trips. Providing transit service to the elderly and disabled is a major objective of rural transit ser-
vice. Local governments are obligated to provide accessibility and mobility to the disabled according to the Americans with Disability Act (ADA). By improving the accessibility and mobility of the elderly and the handicapped, rural transit service also helps retain the vitality of rural communities, increase the linkage between rural residents and rural economic activities, and improve rural economic development. Without transit services, some residents without a car may be forced to relocate to other areas where transit service is available, while others may have to purchase a vehicle. The number of residents who relocate for lack of transit service are of primary interest to the public benefit-cost analysis of the local government, while the number of vehicle purchases is of primary interest to the transit users benefit-cost analysis of individuals, as well as social and environmental external analysis. Because the focus of this study is the economic impact of rural transit provided through GDOT and social service organizations statewide, the costs and benefits of vehicle ownership are not discussed here. Litman [1995] offers an interesting discussion on automobile dependency as a cost.
Rural transit service also facilitates those workers who do not own a car, or one-car households with two workers, in securing a job that they may not get without it. The lack of transit service would cause hardship for workers without automobiles. About 8% of workers living in rural areas take transit to work, according to the 1990 Nationwide Personal Transportation Survey (NPTS). In Georgia, about 2.8% of all work trips were ma( le by transit in 1990, but only 0.67% of workers takingtransit to work reside in rural areas (County and City Data Book, 1994). In the absence of transit service, these workers could not work, or may only work within walking
25

distance, perhaps earning the minimwn wage. Without alternative commute modes, some of them would be forced to purchase an automobile, and some of them have to relocate to urban areas where they are more accessible to jobs.
4.3.1 Benefit Analysis of Transit Service to the Elderly
About 15 % of the households in rural areas in the United States with a household-head
aged 55 or over have no automobile (1990 NPTS). Among those zero-vehicle elderly households, 16% of them depend on transit (Lave and Crepeau, 1994). The rest may rely on friends and relatives for their transportation needs. In other words, about 2.4% of the elderly in rural areas are transit dependent. In the South Atlantic region, about 17.5 % of elderly households in rural areas have no automobile, and 9% of these households depend on transit (1990 NPTS). Therefore, about 1.6% of the elderly in rural areas at the South Atlantic region are transit dependent. As there are only a few sample households from rural Georgia in the 1990 NPTS, the sample data are too small to be reliable. The South Atlantic region average of transit dependence is thus applied to rural Georgia.
The number of elderly who are transit dependent in a county or state is estimated using 1.6% of the population that is 65 years old and older. The contribution of these transit dependents to the economy is determined by their demand to or expenditure on goods and services. The expenditure of those transit-dependent elderly adds value to the economy.
According to the 1991 Conswner Expenditure Survey by the Bureau of Economic Analysis, the elderly population spend atout 98.5 % of their before-tax income and 105 % of their aftertax income annually (usually dipping into savings). The key question is how much of the elderly expenditure is spent locally, because some of the expenditure may be spent in larger
26

counties with wider ranges of commodity choices. This outside spending will have little impact on the local economy.
To determine the local share of elderly expenditures, this study considers the relative concentration of retail sale and service industry in the county to the state average. If there is a high concentration of retail sale and service industry in the county, the local residents will be more likely to patronize these local retail and services, and thus more likely to spend the money inside the county. If the local retail and service industry is small and it cannot meet the needs of local residents, residents may need to go to larger counties. This is similar to the location-quotient concept widely used in the regional economics in the analysis of regional import and export sectors (Sullivan, 1990). The formula to estimate the portion of local expenditure (P) is:
p = County employees in retail sale and service industry/County population State employees in retail sale and service industry/State Population
The denominator is the share of retail sale and service employees in the state. It provides a measure of how many retail and service employees are needed to satisfy the local demand for retail and services for the state average. For example, for the state as a whole, it takes about 139 employees of retail sale and service to meet the needs of one thousand people. If a county actually has only 100 employees in retail sale and service industry per one thousand people, some of the retail and services may be acquired from outside the county, i.e., some expenditure of county residents will likely be spent outside the county. Ifthe county has 150 employees in retail and service industry per one thousand people, the expenditure of local residents is more likely to be spent locally. In addition, the larger concentration of retail and service industry will
27

draw customers from other counties. IfP is equal or larger than 1, all elderly expenditures are assumed to be expended locally, i.e.,
within a county boundary. IfP is smaller than 1, the total expenditures will be adjusted by the factor P. It assumes that only P percent of expenditure will be spent locally.
It should be noted, however, that the match and mismatch of retail and service industry and local demands depend on the type of services and goods that are provided by the industry and are desired by local residents. If the amount and the types of retail and services provided in the county can exactly match the local residents' needs, even though there are only 50 employees in the retail and services per thousand population, they are still attractive to local dollars. However, this needs very detailed information regarding the type of service and goods that are provided by the local industry and are desired by local residents. This information is currently unavailable and is difficult to obtain.
The expenditure on local goods and services stimulates production of local industries and services. In other words, the local expenditure will have indirect and induced effects on other sectors of the economy. The inter-industry relationships within regions are usually represented by regional input-output (1-0) multipliers, which account for inter-industry relationships within regions. Regional 1-0 models are useful tools for regional economic impact analysis (Beemiller, 1990; Strathman and Dueker, 1988).
Coefficients of the output multipliers are derived from the Regional Input-Output Modeling System (RIMS II) published by the Bureau of Economic Analysis. These direct requirements coefficients are derived from the 1987 benchmark input-output accounts for the U.S. economy, which shows the input and output structure of more than 500 industries, and 1992 regional data, which is used to adjust the national direct requirements coefficients to show a region's industrial
28

output and trading pattern. Regional multipliers for industrial output, earnings, and employment are then estimated on the basis of the adjusted coefficients.
The expenditures for services and products are changes in final demand. The impacts are estimated by multiplying each final-demand change by the appropriate RIMS II multiplier. It should be noted that the expenditures for manufactured goods reflect charges for the output of wholesalers, retailers, and transporters, as well as of manufacturers. Assuming that the wholesalers, retailers, and transporters are located in the county and the manufacturers are located outside the county, the charges for wholesale trade, retail trade, and transportation output (but not manufacturing output) are changes in fmal demand in the county.
To calculate the economic impacts on the county of the expenditures by the elderly for manufactured goods, the expenditures for each good must be converted into final-demand changes in wholesale trade, in retail trade, and in transportation. For each good, the final-demand changes can be estimated by multiplying the final expenditure by the percentage shares of national personal consumption expenditures (PCE) for the goods that are accounted for by the wholesale trade, retail trade, and transportation industries. For example, the final-demand changes associated with the expenditure for food can be estimated by multiplying the expenditure on food by the shares of national PCE for food that are accounted for by wholesale trade margins (9%), retail trade margins (23%), and transportation costs (2%).
To simplify the calculation of the economic multiplier effect, the total multiplier of elderly expenditures is a weighted multiplier, using the share of expenditure on each product or service as the weight. Furthermore, to take into account the effect of county- size, two weighted multipliers were calculated for the elderly expenditures. One is for smaller counties, using the RIMS II multipliers in rural southwest Georgia, and the other is for larger counties, using the average
29

RIMS II multipliers in the state of Georgia. The calculated weighted output multiplier of the elderly expenditure for smaller counties is about 1.3, and about 1.7 for larger rural counties with 1990 population over 70,000.
Once the annual expenditure and the consumption patterns are known, the key question is to determine how many elderly residents will relocate and how many will purchase a vehicle if there is no transit service in the community. There are no data indicating the proportion of residents who may relocate and the proportion of residents who may stay and purchase a vehicle. The decision of residential location and transit mode choice is a self-selection process (Peng, et. aI., forthcoming). People who like to take transit are more likely to reside in an area where transit service is available, and people who do not like to take transit are more likely to make their residential location choice based on factors other than the availability of transit services. In the absence of transit service, fewer transit-dependent residents would choose to live in the area. In the case of discontinuation of the current transit service, most of those transit-dependent residents will be more likely to relocate than stay and purchase a vehicle. This is true especially in the long run. Furthermore, those elderly who do not currently own a vehicle may have difficulties in operating a vehicle, or incur economic hardships in owning a vehicle. Without transit service, these households will be less likely to purchase a vehicle. Therefore, it is reasonable to assume that most ofthose transit-dependent elderly households would relocate out ofthe county in the absence of rural transit service.
The total annual economic benefit from elderly riders is calculated from the number of elderly that are transit dependent times the amount of annual expenditure per capita. These expenditures are adjusted by using the percent of per capita retail and service employees over the state average (P) to calculate the local portion of the expenditure. The local expenditure is then multiplied by
30

the economic output multiplier to calculate the adjusted total multiplied economic benefits per year. The estimated economic benefits of elderly riders for all rural counties in Georgia is shown in Table 4 on page 33.
4.3.2 Fiscal Revenue Benefits of Elderly Transit Riders
In addition to the economic output impact of transit service, the local (county) governments also have fiscal revenue impacts. Fiscal revenues of county governments are generated mainly from county taxes and user fees, as well as intergovernmental revenue transfers. Because of the complexity of different taxes and user fees, it is difficult to calculate fiscal revenue impacts directly from consumer expenditures. As a proxy, this study uses the proportion of the county own-source revenue over the total personal income as a local revenue generating factor. It should be noted that the amount ofthe county own-source revenue is dependent on the rate of taxes and user fees. A higher tax rate and user fee will generate higher fiscal impacts, and a lower tax rate and user fee will generate lower fiscal impacts. The state average of the local revenue generating factor for Georgia is about 5.22%.
The total revenue impacts are the product ofthe total income oftransit-dependent elderly and the local revenue generating factor. The estimation of revenue impacts of the elderly riders for all rural counties in Georgia is shown in Table 4 on page 33.
4.3.3 Benefit Analysis of Transit Work Trips
Transit share in work trips is very small in rural Georgia. Only about 0.67% of workers take transit to work. It is lower than the state average of2.8% transit work trips and the national rural average of7.9%. Among the transit trips, about 9% are work trips (see Table 3, page 23).
31

In spite of a small portion ofthe work trips, transit service is essential to those workers. The small portion of workers who are transit dependent are either unable to afford a car or have only one car in a two or more worker household. According to the 1990 NPTS data, the average income for rural workers in the South Atlantic region who are transit dependent is only about three-fourths that of all workers in the rural areas. Without transit services, most of these workers could not work or could only work within walking distance with less pay. It can be reasonably assumed that without transit service, most of these transit-dependent workers will lose their current income. Therefore, the average income of those transit-dependent workers can be considered as the earned income benefit from rural transit service.
The earned income benefit will also have a multiplied impact on the local overall economic development. Similar to the economic output multipliers for the elderly, the economic output multiplier is calculated from the average expenditure patterns. The weighted output multipliers for smaller and larger rural counties are 1.44 and 1.88, respectively. The product of the earned income benefit and the economic multiplier is the economic benefit of the rural transit service. The revenue impact can be directly derived from the economic benefits, which is the product of the revenue generating factor and the earned income benefits. The estimation of economic and revenue impacts of transit work trips for all rural counties in Georgia is shown in Table 4 on the following page.
32

Table 4. Economic and Fiscal Benefit/Cost Analysis for Rural Georgia Counties

Economic Benefits

Elderly Riders

Work Trips

56,296,814

55,071,557

Fiscal Benefits

Elderly Riders

Work Trips

2,380,075

2,121,707

Costs

Federal Subsidy

Local Budget

$1,671,059 $2,213,620

With Federal Subsidy

Economic Impacts

Fiscal Impacts

Net Transfer Impact

Benefit! Cost Ratio

Net Transfer Impact

Benefit! Cost Ratio

$111,368,371 50.31

$4,501,782

2.03

Source: 1994 County and CIty Data Book

Without Federal Subsidy

Economic Impacts

Fiscal Impacts

Net Transfer Impact

Benefit! Cost Ratio

Net Transfer Impact

Benefit! Cost Ratio

$109,697,312 28.2

2,830,723

0.73

4.4 Cost Analysis of Rural Transit Service
Different costs are involved in providing and using rural transit service. For the transit service providers, there are costs of maintenance, operation, and management. For transit service users, there are costs associated with travel time and fare. Because the focus uf this study is on the benefits and costs ofproviding transit service by rural county government, the costs (and benefits) oftransit users are not included in this analysis.
In the aggregate, costs ofproviding transit service include the fixed costs of purchasing buses or vans and the operating costs, i.e., maintenance and management costs. The annualized fixed costs can be estimated using the annual depreciation derived from the purchase cost of a vehicle divided by the number of years needed to replace it. The operation costs can be mostly represented by the total operating budget for transit service.
According to the Georgia Department of Human Resources, six thousand (6000) vans have been purchased for social services, to be leased by or loaned to social service groups. The average purchase price for a standard van that is used in most rural counties is about $20,000, with a

33

replacement period of about 5 to 6 years. The annualized fixed cost of one vehicle is about $3,300 to $4,000. The average purchase price for a larger bus is about $40,000, which lasts about 7 years. Thus the annualized fixed cost of a larger bus is about $6,000. The proportion of standard vans to larger buses owned by rural counties is not currently available, but after consulting with transit service providers, an annualized average fixed cost of about $5,000 per vehicle was assumed.
The total operating budget includes revenues from the federal and local governments, as well as fare revenues. Fare revenue is generated from users, which is not part of the operating costs. Furthermore, if the cost-benefit is calculated on the local (county) government level, the federal subsidy would not be considered part of the local government costs. Therefore, only the budget from the local government itself represents the local costs of providing transit service.
4.5 Benefit/Cost AIlalysis of Providing Rural Transit Service The overall economic benefit/cost and fiscal impact analyses are applied to transit dependent elderly and workers at the county level. In addition, the economic and revenue benefit/cost analysis are also conducted in situations of the current level of federal transit subsidy and in the absence of federal transit subsidy. The benefits of local transit service include benefits from elderly riders and benefits from transit work trips. Furthermore, from the standpoint of local government, fare revenues from transit users and revenue from federal transit subsidies are also considered (transfer) benefits of providing transit service. Without transit service, the federal transit subsidy would not be granted. The costs of providing local transit service include fixed costs and operating costs. The net gain or loss is the difference between total benefits and total costs. The benefit/cost ratio is the
34

product of total benefits divided by the total costs, which is the ratio of net gains or losses to oneunit (dollar) of investment. The net economic and revenue gains (losses) for the state's rural counties with transit service are shown in Table 4.
The economic impact of rural transit service for the state as a whole (including rural counties with transit service only), given the current level of federal transit subsidy, is positive, and the benefit/cost ratio is much larger than 1.0. Even in the absence of federal subsidy, assuming the local governments pay all the operating and fixed costs, the local economic impacts are quite positive and the economic benefit/cost ratio is larger than 1.0. The revenue impact is also positive, but the revenue benefit/cost ratio is less than 1.0.
The economic benefit is quite large. Investing one dollar of local money in transit service generates about $50 of total economic output in the rural counties, given the current level of federal transit subsidy. Excluding the federal transit subsidy and assuming the local governments pay all the costs, a one-dollar investment still generates about $28 of economic output for the rural counties in Georgia. The economic benefits seem to be large but reasonable. Excluding fare, a round trip using transit, is about $2.15 in rural Georgia (GDOT estimates). The economic benefits of $28 from one-dollar investment in transit service can be interpreted as follows: a round trip costs transit providers $2.15, which results in a multiplied expenditure of $60.20 ($2.15 x 28) and the direct expenditure of$32 (excluding the multiplied effect, $60.20/1.88) per transit trip. This expenditure of $32 per trip is a reasonable amount of expenditure or income for an average transit trip, whether the trip is made for shopping, medical care, or work.
The fiscal revenue impact on local governments from providing transit service is much smaller than the total economic output impacts. It measures the return of investment to the local government itself and is thus a more direct measurement of investment-return ratio. With the
35

subsidy from the federal government, a one local dollar investment in transit service will generate about $2.03 of revenue returns. Without the federal subsidy, the local government has to pay all the costs, and a one dollar investment results in $0.73 in revenue returns. The revenue return is positive, but the revenue benefit-cost ratio becomes small.
4.5.1 Marginal Benefit-Cost Analysis The net economic and revenue gains shown in Table 4 are the average gains of the current transit service. However, these net economic and revenue gains cannot be interpreted as the marginal gains . Average economic and revenue gains are calculated by subtracting total costs from the total benefits, while the marginal gain is the additional benefit from providing one more unit of transit service. The concept of marginal benefit and marginal cost is illustrated in Figure 1 below.
s
Marginal Cost
_------1--- Total Bene fit
Marginal Benefit
Quantity of Service Figu:-c I. An Illustration of Marginal Benefit and Marginal Cost
36

At a low level of transit service, the cost of providing one more unit of transit service is low, as is the benefit, since only a few people can use the service. As more service is provided and more people use the service, the operating cost increases, the benefits increase, and the net marginal benefits increase. At the point where the service provided can serve the most people's needs, the total benefit reaches the maximum point. Beyond this point, providing more service will not generate more economic benefits for the service provider. The marginal operating cost will increase dramatically, but the net marginal benefit will decline.
The economic and revenue benefits presented in this paper are the maximum benefits based on the number of population and number of transit users in 1992. Assuming the population of transit-dependents is constant, and the current service can adequately meet customers' service demands, improving transit service by increasing service frequency will not add much economic and revenue benefits. Rather, it will increase operating costs, because the revenue recovered from the fare is less than the increase of operating costs. Therefore, improving transit service will reduce the marginal benefits, although it may increase the convenience of the riders. The marginal benefits will become smaller. However, when the elderly population increases as indicated in the national population growth trend, and/or current transit service is not adequate to meet riders demand, improving service may increase economic and revenue benefits. Furthermore, a better transit service may draw workers and businesses from other regions, and may induce more transit use. The generated economic benefits will increase accordingly. These generated benefits from population and business migration are difficult to measure because of a lack of reliable data.
Will reducing the transit service increase the net benefits? This will be determined by the
37

number of riders and consumers lost from a service change, as well as current level of transit
service provided. Ifthe economic loss ofthe lost riders and consumers is larger than the cost
reduction, the net benefits will drop. If the economic loss for the lost riders and consumers is
smaller than the cost reduction, the net benefits will increase. Further analysis is needed to esti-
mate the ridership fluctuation with service changes. The adequacy oftransit service can be
determined by whether the current service provided can meet the demand from the users. This
can be evaluated because many rural transit services in Georgia are demand responsive service.
5.0 USERS GUIDE This section providesguidelines for the use of the benefit/cost methodology. As such, this
section can act as stand-alone guidance material. However, there are many caveats that need to
be considered at the outset. Most importantly, this methodology was developed using regional
and state averages. For those counties where better local data is available, users are encouraged
to substitute their own values. Caveats for initial consideration include the following:
1. The methodology focuses on the economic benefits and cost related to rural transit servIce.
2. Many studies have shown the social and psychological benefits of enhanced mobility. However, these benefits are hard to quantify in dollars, the basic unit for benefit/cost analysis.
3. The methodology is simple to understand and use. Straightforward relationships form the basis of benefits and costs estimation.
4. The model can be used for two major purposes: (a) to determine the impact of transit service on the state economy and (b) to determine the impact of transit service on a particular county or multi-county area. In the step-by-step model description, beginning on page 41, the impact of transit service on the state economy is considered. Substituting local values is simply a matter of changing (a) values that correspond to state figures to values for a particular county, and (b) sum figures for rural counties to figures for a city or cities
38

within a particular county. Multi-county areas may also be studied in like manner by substituting multi-county figures for state figures, and municipal figures for sum rural county figures. 5. The impacts on two population groups, the elderly and workers using transit, are measured. These two groups are the major users of rural transit, although not the only users. Therefore, the estimates that result from this methodology are fairly conservative from the perspective of the total benefits of the transit service. 6. The methodology as developed is only applied to those counties classified as rural, inner exurban, and outer exurban counties. These population classifications are based on 1990 U.S. Census figures as found in the 1994 County and City Data Book. Rural, inner exurban, and outer exurban counties are collectively referred to as "rural" in the methodology. Figure 2 on page 40 shows the classification categories for all Georgia counties. These classification categories, based on U.S. census figures, are discussed in Appendix B.
39

Classification
I~~t$,a Major Urban Suburban
f/"J Minor Urban
DInner Exurban
I:;:::; I Outer Exurban
o Rural

"::::::::.::;',.::::::;::::::::::.:::;::::::::
4~)III~mljj~ .... :::::::::.:::::::::::::

Brooks

Lowndes

Figure 2. Georgia County Classification
40

The steps of the methodology are described below and summarized numerically in Tables 5-10. Each table is followed by formulas for the computations performed therein. As noted previously, ifusers of the methodology have better data that can be used, they are encouraged to do so.

Step 1: Estimate Economic Benefits from Elderly Riders

Table 5 shows the method of estimating the economic benefits associated with elderly riders.

Obtain annual per capita income for all rural counties in Georgia (default values in 1994 County and City Data Book, see Item A below).

Estimate number of elderly who use transit [multiply total population (C) by percent 65 or over (D) by percent 65 or over without car (F) by percent of this group who use transit (G)].

Multiply number of elderly transit riders (H) by annual per capita income (A) by percentage expenditures representative of annual per capita income [default value in 1991 Consumer Expenditure Survey, see (B)]. This results in the total annual economic benefit from elderly riders (I).

Multiply total economic benefit (I) by percentage of county retail and service employees compared to state average (1). Multiply by 1.74, which is the multiplier Letor for associated economic benefits associated with elderly riders (K). This results in total annual economic benefit from elderly riders (L).

Table 5. Economic Benefits from Elderly Riders

A

$17,503 Amount of annual income per capita (1994 dollars, County and City Data Book)

B

98.46% Percent expenditure of elderly over annual income (1991 Consumer Expend. Survey)

C 1,526,099 Total population (all rural counties, 1992)

D

10.84% Percent of population with age of 65 and over

E

165,367 Total population with age of65 and over

F

17.50% Percent of elderly 65+ without car (1990 NPTS data, South Atlantic Region)

G

9.00% Percent that use transit (1990 NPTS, South Atlantic Region)

H

2,605 Number of elderly that must use transit

I 44,893,147 Total annual economic (transfer) benefit from elderly riders

J

72.07% Percent of per capital retail and service employees over the state average

K

1.74 Multiplier factor

L $56,296,814 Adjusted total annual economic benefit from elderly _ ride_ rs _ _ _ _ _ _ _ _ _..1

L=I*(J/l OO)*K I=H*A*(B/lOO) H=C*[(D*F*G)/100]

41

Step 2: Estimate Fiscal Revenue Benefits from Elderly Riders

Table 6 shows the approach to estimate fiscal revenue benefits associated with elderly riders.

Obtain annual per capita income for all rural counties in Georgia (A).

Estimate revenues from taxes and state rebates to the rural counties (B). Estimate total personal income for the state (C). Bot~ (B) and (C) come from the County and City Data Book.

Estimate percent oflocal tax revenues (B) compared to average personal income (C).

Multiply number of elderly riders that use transit (E) by percentage tax revenues (D) to get fiscal revenue benefits from elderly riders.

Table 6. Fiscal Revenue Benefits from Elderly Riders

A

$17,503 Amount of annual income per capita (in 1994 dollars)

B 1,325,143,009 Own-source revenues (1994 dollars) [County and City Data Book, 1994]

C 25,366,460,899 Total personal income (1994 dollars) [County and City Data Book, 1994]

D

5.22% Percent of own-source revenues to personal income

E

2,605 Number of elderly that must use transit (from 5E)

F

$2,380,075 Fiscal revenue benefits from elderly riders

F=E*A*(D/l 00) D=(B/C)* 100

Step 3: Estimate Economic Benefits of Transit Work Trips
Table 7 shows the approach to estimate the economic benefits of transit work trips.
Estimate percent of rural workers using transit for work trip (default 0.67%) (A).
Multiply this percentage by total number of workers in rural Georgia (B) to get the number of workers using transit to work (C).
Estimate percentage of workers who would lose jobs or only get minimal wage jobs without transit service (default 60%) (D).
Obtair average wage for w)rkers who use transit (F). Multiply this average wage by number of war i<.ers who use transit ~o get to work by percentage who would lose jobs without transit to get total annual economic benefit (G).
Multiply total economic benefit (G) by percentage of county retail and service employees compared to state average (H). Multiply by 1.88, which is the multiplier factor for associated

42

economic benefits with workers (1). This results in the total economic benefit from work trips taken by rural transit (1).

Table 7. Economic Benefits of Transit Work Trips

A

0.67% Percent of workers taking transit to work (County and City Data Book, 1994)

B

679,273 Total number of workers in rural Georgia

C

4,518 Number of workers using transit to work

D

60.00% Workers which would lose jobs or can only get minimal-wage jobs without transit

E

20,331 Average wage of rural workers (1994 dollars) [County and City Data Book, 1994]

F

14,994 Avg. wage for workers using transit (1994 dollars, from 1990 NPTS, S. Atlantic region)

G 40,645,735 Total annual economic benefit (assume one worker per household)

H

72.07% Percent of per capital retail and service employees over the state average

I

1.88 Multiplier factor

J $55,071,557 Adjusted total economic benefit from work trips

J=G*(H/100)*1 G=F*C*(D/lOO) C=A*B

Step 4: Estimate Fiscal Revenue Benefits of Transit Work Trips

Table 8 shows the approach to estimate the fiscal revenue benefits of transit work trips.

Estimate local tax revenues and state rebates for the rural counties (A).

Estimate total state personal income (B).

Divide to obtain percentage local tax revenues as percentage of personal income (C).

Using total annual economic benefit for work trips from Step 3 (D), multiply by percentage local tax revenue (C) to obtain fiscal revenue benefits from transit work trips (E).

Table 8. Fiscal Revenue Benefits of Transit Work Trips

A $1,325,143,009 Own-source revenues (1994 dollars) [County and City Data Book, 1994]

B 25,366,460,899 Total personal income (1994 dollars) [County and City Data Book, 1994]

C

5.22% Percent of own-source revenues to personal income

D

40,645,735 Total annual economic benefit

.E

$2,121,707 Fiscal revenue benefits from transit work trips

E=D*(C/l 00) C=(AIB)*100

43

Step 5: Estimate Total Economic Benefit/Cost and Fiscal Revenue/Cost Ratios

Tables 9 and 10 show how one can calculate the total economic benefit to cost ratio and the

fiscal revenue to cost ratio. Certain values in previous tables are referred to in the following

format: (5L) indicates the value in line L of Table 5. For purposes of this analysis, the total fare

revenue, which is incorporated into the net economic benefit from elderly riders and work trips,

is $735,651 (1994 GDOT figures for all rural counties).

Obtain total federal rural transit subsidy and total local operating subsidy (A,B).

Estimate annualized vehicle depreciation fixed costs (C).

Add economic benefits from elderly (5L) and worker (7J) trips to obtain local net economic benefits (or losses) with federal subsidization (9D). Divide by costs (9B+9C) to obtain benefit/cost ratio with federal subsidization (9E). To obtain the B/C ratio without federal subsidization (9G), subtract the total federal subsidy (A) from (9D) and divide by costs (9A+9B+9C).

Add local net revenue benefits for elderly (6F) and worker (8E) trips and divide by costs (10B+IOC) to obtain fiscal revenue B/C ratio with federal subsidization (10E). To obtain the B/C ratio without federal subsidization (10G), subtract the total federal subsidy (10A) from (10D) and divide by costs (10A+lOB+lOC).

Table 9. Total Economic Benefit/Cost Analysis

A $1,671,059 Total federal subsidy (Georgia DOT figures, 1994)

B

1,263,620 Total local operating subsidy (Georgia DOT figures, 1994)

C

950,000 Fixed Costs - Annualized Vehicle Depreciation

D 111,368,371 Local net economic benefits (or losses) with federal transit subsidy

E

50.31 Local economic benefit/cost ratio of transit subsidy (with federal subsidy)

F $109,697,312 Local net economic benefits (or losses) without federal transit subsidy

G

28.2 Local economic benefit/cost ratio of transit subsidy (without federal subsidy)

G=F/(A+B+C) E=D/(B+C) F=D-A D=5L+7J

44

Table 10. Total Fiscal Revenue/Cost Analysis

A $1,671,059 Total federal subsidy (Georgia DOT figures, 1994)

B

1,263,620 Total local subsidy (Georgia DOT figures, 1994)

C

950,000 Fixed Costs - Annualized Vehicle Depreciation

D

4,501,782 Local net revenue benefits (or losses) with federal transit subsidy

E

2.03 Local revenue benefit/cost ratio of transit subsidy (with federal subsidy)

F $2,830,723 Local net revenue benefits (or losses) without federal transit subsidy

G

0.73 Local revenue benefit/cost ratio of transit subsidy (without federal subsidy)

G=F/(A+B+C) E=D/(B+C) F=D-A D=6F+8E

The application of this analysis for selected Georgia counties is shown in Tables 11 and 12 on pages 46-47. Tables 11 and 12 are the results obtained when using the default values described in Steps 1-5. Local values for the input data would obviously change the benefit/cost ratio for a particular county.

45

Table 11: Economic and Fiscal Revenue Benefit/Cost Analysis for Selected Georgia Counties
(With Federal Subsidy)

County
Banks Bartow Bleckley Bryan Burke Catoosa Chattahooch. Cherokee Clay Columbia Crawford Dade Dodge Douglas Elbert Emanuel Fannin Forsyth Gilmer Glascock Gordon Greene Habersham Hall Hancock Haralson Hart Henry Jackson Jefferson Jenkins

Economic Impact

Net Gain

B/C

or Loss

Ratio

196585

15.66

3,112,526

42.59

308,310

7.51

377,259

6.96

493,712

9.56

718,677

11.14

20,808

0.75

2,223,615

37.91

72,162

2.07

1,878,687

67.95

119,495

3.51

238,808

13.19

1,430,015

29.27

3,911,616

47.33

732,682

14.37

640,310

27.8

743,736

14.87

1,564,074

42.8

625,998

16.6

24,711

1.06

1,297,534

34.97

447,711

7.98

1,201,652

38.88

7,394,794

67.45

242,772

6.69

744,544

16.61

558,520

24.45

2,254,468

55.49

730,888

22.84

571,783

9.96

104,736

4.67

Fiscal Impact

Net Gain

B/C

or Loss

Ratio

14176

1.13

130,971

1.79

24,018

0.59

13,315

0.25

393,059

7.61

99,502

1.54

394

0.01

98,045

1.67

13,516

0.39

57,119

2.07

17,418

0.51

16,038

0.89

79,883

1.64

115,984

1.4

34,922

0.68

57,209

2.48

41,330

0.83

55,651

1.52

29,072

0.77

4,985

0.21

63,039

1.7

44,228

0.79

80,585

2.61

343,445

3.13

40,072

1.1

53,035

1.18

35,245

1.54

167,336

4.12

65,758

2.05

46,291

0.81

14,963

0.67

County
Laurens Lincoln Long Lumpkin McDuffie Montgomery Morgan Murray Paulding Peach Pickens Pierce Pulaski Putnam Quitman Rabun Talbot Taliaferro Telfair Tift Treutlen Troup Twiggs Walker Warren Wheeler Whitfield Wilcox Wilkes Wilkinson

Economic Impact

Net Gain

B/C

or Loss

Ratio

4,614,282

128.6

110,829

5.57

8,649

0.26

234,440

11.39

822,430

17.45

225,085

8.75

520,597

12.51

152,229

3.28

512,466

13.66

788,889

22.29

363,092

8.96

266,298

11.26

269,625

19.31

208,678

5.19

21,135

1.52

640,111

51.8

46,418

0.91

30,125

1.16

659,816

26.81

3,919,660

104.46

82,689

6.33

10,230,904

214.41

78,207

5.94

1,650,559

31.07

299,935

11.84

100,734

7.66

5,162,593

48.04

369,360

14.89

648,517

18.75

172,103

13.07

Fiscal Impact

Net Gain

B/C

or Loss

Ratio

249,237

6.95

13,028

0.65

8,737

0.26

11,702

0.57

46,402

0.98

10,116

0.39

26,944

0.65

30,458

0.66

69,878

1.86

63,674

1.8

31,635

0.78

20,251

0.86

16,963

1.21

42,361

1.05

5,241

0.38

29,136

2.36

14,996

0.29

5,572

0.21

37,767

1.53

241,957

6.45

9,583

0.73

476,695

9.99

16,413

1.25

59,315

1.12

39,179

1.55

17,041

1.3

306,077

2.85

19,453

0.78

49,321

1.43

24,645

1.87

Table 12: Economic and Fiscal Revenue Benefit/Cost Analysis for Selected Georgia Counties
(Without Federal Subsidy)

County
Banks Bartow Bleckley Bryan Burke Catoosa Chattahooch. Cherokee Clay Columbia Crawford Dade Dodge Douglas Elbert Emanuel Fannin Forsyth Gilmer Glascock Gordon Greene Habersham Hall Hancock Haralson Hart Henry Jackson Jefferson Jenkins

Economic Impact

Net Gain

H/C

or Loss

Ratio

177,215

7.97

3,008,634

24.06

248,186

3.49

309,507

3.51

418,072

4.67

630,857

5.82

-2,144

-0.05

2,126,915

19.88

17,458

0.28

1,828,387

34.63

69,219

1.17

214,068

7.02

1,345,245

14.74

3,816,416

29.3

649,082

6.99

604,050

14.68

659,736

7.17

1,504,830

22.74

562,458

8.1

-9,101

-0.23

1,235,334

18.11

361,877

3.65

1,155,152

21.33

7,214,008

36.06

183,822

2.8

674,904

8.47

529,410

14.16

2,185,920

29.18

677,218

11.51

487,363

4.89

72,596

1.89

Fiscal Impact

Net Gain

H/C

or Loss

Ratio

-5,194

-0.23

27,079

0.22

-36,106

-0.51

-54,437

-0.62

317,419

3.55

11,682

0.11

-22,558

-0.58

1,345

0.01

-41,188

-0.66

6,819

0.13

-32,858

-0.56

-8,702

-0.29

-4,887

-0.05

20,784

0.16

-48,678

-0.52

20,949

0.51

-42,670

-0.46

-3,593

-0.05

-34,468

-0.5

-28,827 839

-0.72
om

-41,606

-0.42

34,085

0.63

162,659

0.81

-18,878

-0.29

-16,605

-0.21

6,135

0.16

98,788

1.32

12,088

0.21

-38,129

-0.38

-17,177

-0.45

County
Laurens Lincoln Long Lumpkin McDuffie Montgomery Morgan Murray Paulding Peach Pickens Pierce Pulaski Putnam Quitman Rabun Talbot Taliaferro Telfair Tift Treutlen Troup Twiggs Walker Warren Wheeler Whitfield Wilcox Wilkes Wilkinson

Economic Impact

Net Gain

H/C

or Loss

Ratio

4,557,162

70.72

82,699

2.44

-33,689

-0.62

203,920

5.69

749,810

8.99

182,959

3.91

464,567

6.67

74,729

0.88

454,126

6.81

730,503

11.31

289,152

3.73

227,664

5.3

243,955

9.1

137,824

1.82

-43

0

623,513

30.19

-31,660

-0.35

-8,651

-0.19

620,114

13.95

3,867,932

61.02

58,685

2.34

10,149,130

114.55

53,879

2.13

1,588,339

18.85

255,715

5.39

76,874

3.07

5,034,593

29.36

329,274

7.34

592,657

9.48

147,751

5.83

Fiscal Impact

Net Gain

H/C

or Loss

Ratio

192,117

2.98

-15,102

-0.44

-33,601

-0.61

-18,818

-0.53

-26,218

-0.31

-32,010

-0.68

-29,086

-0.42

-47,042

-0.55

11,538

0.17

5,288

0.08

-42,305

-0.55

-18,383

-0.43

-8,707

-0.32

-28,493

-0.38

-15,937

-0.65

12,538

0.61

-63,082

-0.7

-33,204

-0.73

-1,935

-0.04

190,229

3

-14,421

-0.58

394,921

4.46

-7,915

-0.31

-2,905

-0.03

-5,041

-0.11

-6,819

-0.27

178,077

1.04

-20,633

-0.46

-6,539

-0.1

293

0.01

6.0 CONCLUSIONS This study has estimated two important impacts of rural transit service in Georgia from the
standpoint of local (county) government: the overall economic impacts and the fiscal revenue impacts. The economic impact of rural transit service is large and positive. It indicates rural transit service is a significant means to retain the vitality of rural area economic development.
The overall fiscal revenue impact of rural transit service depends on the availability and amount of federal subsidies and the tax rate of local governments. The fiscal revenue benefit/cost ratio is positive and greater than 1.0 for the rural counties of the state of Georgia, given the current level of federal transit subsidy and the current level ofcounty tax and user charges. It shows that, in addition to providing mobility and accessibility to those with transportation disadvantages, rural transit services also promote economic development and bring positive fiscal revenues for local governments. However, without federal transit subsidy, the fiscal impact be-comes smaller, and the benefit/cost ratio would become less than 1.0 for rural parts of the state as a whole. The fiscal and economic impacts would both decrease about 40% where federal subsidies are not provided. Changes in the county tax rate will also change the fiscal revenue impact.
It should be noted, however, that some other economic and non-economic benefits resulting from transit service are not quantified in this study. For example, non-work trips such as shopping, medical and/or recreational trips taken by non-elderly transit dependents will generate benefits for transit users and economic benefits for the local economy, but they are not quantified in this study for the lack of data. The noneconomic benefits, including environmental benefits, benefits of reducing auto dependence, parking requirement impacts, land use impacts, and so on, are not quantified either. Furthermore, the benefits and costs to individual commuters, including
48

the economic, social, and human benefits of providing rural residents accessibility and mobility,
travel time costs and monetary costs, are not dealt with in this study. Further studies need to
address such benefits and costs more thoroughly.
7.0 REFERENCES
Beemiller, Richard M., "Hybrid Approach to Estimating Economic Impacts Using the Regional Input-Output Modeling System (RIMS II)," Transportation Research Record 1274, Transportation Research Board, National Research Council, Washington, D.C., 1990.
Jara-Diaz, Sergio R., "On the Relation Between Users' Benefits and the Economic Effects of Transportation Activities," Journal o/Regional Science, 26.2: 379-392, 1986.
Kidder, Alice, "Economics of Rural Public Transportation Programs," Transportation Research Record 578, Transportation Research Board, National Research Council, Washington, D.C., 1976.
Lave, Charles and Richard Crepeau, "Travel by Household Without Vehicles," in 1990 Nationwide Personal transportation Survey Report Series: Travel Mode Special Report, Federal Highway Administration, U.S. Department of Transportation, Washington, D.C., 1994.
Litman, Todd, "Automobile Dependency as a Cost," Victoria Transport Policy Institute, Victoria, BC, Canada, 1995.
Nelson, Arthur C., et aI., Exurban Industrialization, pp. 12-13, Economic Development Administration (adapted for Georgia), Washington, D.C., 1993.
Neuwirth, Roanne, "Economic Impacts of Transit on Cities," Transportation Research Record 1274, Transportation Research Board, National Research Council, Washington, D.C., 1990.
Peng, Zhong-Ren, Kenneth J. Dueker, James G. Strathman and Janet Hopper, forthcoming, "A Simultaneous Route-Level Transit Patronage Model," Transportation.
Strathman, James G. and Kenneth J. Dueker, "Regional Economic Impacts of Local Transit Financing Alternatives: Input-Output Results for Portland," Transportation Research Record 1116, Transportation Research Board, National Research Council, Washington, D.C., 1988.
Sullivan, Arthur M., Urban Economics, Homewood, IL: IRWIN bc., 1990.
Watterson, W.T., 1985 "Estimating Economic and Development Impacts of Transit Investments," Transportation Research Record 1046, Transportation Research Board, National Research Council, Washington, D.C.
49

APPENDIX A
B!BLIOGRAPHY AND OTHER REFERENCES

Bibliography

Notations:



Copy obtained

.. Copy not obtained due to size of docwnent. availability, cost of duplication, etc.

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B~nnath:m. Esm :md Johnson. Mark. "Transport in the Input-Output System" Transportation Researl:h Rel:ord 1274. pp. 104-11 S. **
Birkhaeuser. De:m. Rohert E. Evenson and Gershon Feder. "The Economic Impact Of Agricultural Extension: A Review." &:onomic Development :md Cultural Ch.11lge. 1991. v39(3). pp. 607-650.**
Braun. Bradley M. "Me:L"uring the Influenl:e of Publk Authorities Through Economic Impact Analysis: The Case of Port CanaveraL" Policy Studies Journal. 1990. vIX(4). pp. 1032-1044.*
Briggs. Ronald. "Interstate Highway System and Development in Nonmetropolit.11l Areas." Tr.mspOItltion Research Record 812. pp. 9-12.*
Brisson. Jeffrey. "The Role of Specialized Transport.1tion in Job Development and Training: a Case Study of the City of Hartford's Employment Transport.1tion Service." Presented at the Tenth National Conferenl:e on Spedalized Tr.U1Sport.1tion. SardSota. FL. November 1985.*
Brooks. Willi:un A.. Rohert C. Sanders and Charles P. Conrad. "Economic Benefits From Early Development Of Fusion." Growth and Change. 1978. v9(4). pp. 22-29. **
Brown. Neal A. "Rural Mass Transportation Fe.1Sibility Study." Bluegmss Area Development District. Inc.. Lexington. KY. 1973. [NTIS PB-241 IX6/o]**

A-I

Jorul11sson. B. "Infrastructure Accessibility and Economic Growth:' International Journal of TnlIlSport

Economy. June 1993. v20(2). pp. 131-156.**

.

Johnson. Manuel H. and Bennett. James T. "Regional Environment.'l1 and Economic Impact Evaluation: an Input-Output Approach:' Regional Science and Urban Economics 11(2) (1981). pp. 215-230. *

Jones. Kimberly. Sloggett Gordon. Doeksen. Gerald A. LaRue. Ken. and Smith. Bettie. "An Economic Analysis of a Public TrnnsporL1tion System Serving Seminole County in Oklahoma:' Rural Development Cooperative Extension Service. Oklahoma State University. November 1992.*

Kahn. Quaiser M. "Tmnsaction Costs Approach for Estimating Development Benefits of Rural Feeder Roads." TransporL'ltion Research Record 1274. pp. 202-210.**

Kidder. Alice E. "Economics of Rural Public TransporL'ltion Programs." Transportation Research Record 57R. pp. 1-7.*

Kraft. John and Kraft. Arthur. "Benefits and Costs of Low Rent Public Housing:' Journal of Regional Scienl:e." 1979. vI9(3). pr. 309-317.*

Kukla. Francis P. "The Impact of the Genesee County Airport on Genesee County." Transport.'ltion Researl:h Record 1025. pp. 1-19.*

Laporte. To. Rosenthal. S.. Lee. K. N.. and Levine. E. "Interactions of Technology and Society: Impal:ts of Imprnvd Air Transport. A Study of Airports at the GnlSs Roots:' University of California. Berkeley. InstitUle of Governmental Studies. Berkeley. CA. 19770 [NTIS N7731005/0]**

Leonard. Kenneth J. "Ewnomic Impact of Wisconsin's Tnl11spol14ltion EL:onomic Impact Program:' Transportation Research Record 1274. pp. 270-280. **

Lionjanga. A. V. and R:un~l11. V. "TransporL'ltion and &:onomic Development in Botswana: A Case Study." Transportation Research Record 1274. pp. 211-222.**

MlDertnott. Kevin M. "Reinventing the Infr~lStructure." D & B Reports. Septemher/October 1992. pp. 2013.*

McFarland. Willi;un F. ~md Memmott. Jeffery L. "Rml1dng Highway Construction Project": Comparison of Benefit-Cost Analysis With Other Techni4ues." Tranl>l1orL'ltion Research Record 1116. 19~7. ppo 1-9.*

Metropolitan Transport.'ltion Commission. U. S. Department of Transport.'ltion. "BART in the San Fr:mcisl.:o Bay Area -- The Final Report of the BART Impact Prognun." June 1979. [NTIS PBR 1 107074]**

Mooffil'\ingha Ananda D.. Tufte. Erling A.. and Grigg. Neil S. "Infrastructure and Economic Development: Civil Engineering Perspective:' Joumal of Profession.'l1 Issues in Engineering Education and Practice. 1994. v120. pp. 232-235.**

Morrall. J. F. and Ahdelwahah. W. M. "Estimating Traffic Delays and the Economic Cost of Recurrent Road Closures on Rural Highways:' Logistics and Tmnsport.'ltion Review. 1993. v29(2). pp. 159-177.*

Munnell. Alida Ho "Policy Watch: InfnL'\tructure Investment and Economic Growth." Journal of Economil.: Perspel.:tiv~s. 1992. v6(4). ppo 1~9-19~o*

A-2

Munnell. Alicia H. and Cook. Leah M. "How Does Public Infrastructure Affect Region.ll &onomic Perfonnam;e'?" New England Economic Review. September/October 1990, pp. 11-33.*
Nesius. Ernest J. "Public-Supported Transportation for Rural Areas -- A Study of Mongolia County, West Virginia." West Virginia University Agricultural and Forestry Experiment Station.. Morgantown. WV. 1976. [NTIS PB-268 723/4]**.
Neuwinh. Roanne. "Economic ImpclCts of Transit on Cities." Transportation Research Record 1274, Pl'. 142-49.**
Oaxaca. Ronald L. and Carol A. Taylor. "Simulating The Impacts Of Economic Programs On UrbcUl AreelS: The Case Of Unemployment Insurance Benefits." loum.ll of Urban Economics, 1986. vI9(1), pp. 23-46.*
Oklahoma State University. "A Guidebook for Rural Public Transit Services," Agricultural Experiment Station. Division of Agriculture, Oklahoma State University, 1987.*
Palumho. George. "An &onomic An.llysis: The Impact Of Public Employment Growth," Growth tUld Ch;Ulge. 19H2. v13( I). Pl'. 37-45.*
Pennsylvania Association of Municipal Transportation Authorities. "Mass Transit Md Economic Development in Pennsylvania." 1')88.*
Perera. Max H. "Fr;unework for Classifying and Evaluating Economic Impacts Caused by a Tr.Ulsportation Improvement." Tmnsponation Research Record 1274. pp. 41-52.**
Reph;um. T. J. "Highway Investment and Region.ll Economic Development: Decision Models ;Uld Empirical Foundations." Urhan Studies. M.vch 1993. v30(2). Pl'. 437-450.*
Ring. S. L.. Millett. M. L.. CeU'Stens. R. L.. Meeks. H. D.. and Thompson. W. H. "Integrated Analysis of Small Cities Intercity Tr,Ulsportation to Facilitate the Achievement of Region.ll UrbcUl Goals. Intercity Tr;Ulsportation in Rural Regions: Volume I Inventory and Analyses," Iowa State University Engineering Research Institute. Ames. Iowa. 1975. [NTIS PB-254 930/1]**
Round Tahle on Tr,Ulsport Economics. "Puhlic Transport in Rural Areas: Scheduled and Non-Scheduled
Serviles." Report of the Sixty-Fifth Round Tahle on Transport Economics. February 1984. **
Rucker. George. "Publil Transportation: Another Gap in Rural America," Transportation Quarterly. July IlJX4. v3Xn). Pl'. 41lJ-432.*
Sauter. John V. "Cost Benefit Analysis Of Open Schools BouncL'U'ies." Joum.ll of Urban Economics. 1975. v2(2). Pl'. 172-1HO.*
Seskin. S,unuel N. "Comprehensive Framework for Highway Economic Impact Ac;sessment: Methods and Result.;." Tr.Ulspon.'ltion Research Record 1274. pp. 24-34.**
State of California Deparonent of Transportation. Division of Mass Transportation. "TrMsportation Development Act," January 1994.*
StephcUledes. Yorgos J. cUld Eagle. David M. "Time-Series An.llysis of Interactions Between Tr.Ulsportation ;Uld M;Ulufacturing and Retail Employment," Tr.msportation Research Record 1074. Pl'. 16-24.*
A-3

Stomm~s. Eileen S. and Bearer. Martha A. "Annotmed Bibliography on Rural Intercity Passenger Transportmion." in Transportation Facts. August 1988. U. S. Department of Agriculture. Office of Tr.msporta1ion....
StrahJmm. James G. and Dueker, Kenneth J. "Regional Economic Impacts of Local Transit Financing Alternatives: Input-Output Results for Portland." Transportation Research Record 1116. pp. 40-47.
Vorhees and Associmes.Inc. "An Evaluation of Rural Bus Service. City and County of Honolulu." McLean. VA. 1972. Prep~tred in Cooperation with Barton-Ascfunan Associmes, ChiC.lgO. IL. [NTIS PB211 786]...
U. S. Department of Agriculture. Agricultw'aJ Marketing Service. TransporL1tion and Marketing Division. "Transportation in Rurnl America: a Policy Backgrounder." Washington. D.C., April 1991....
U. S. D~partment of Agriculture. Office of TransporL1tion. "Reconnecting Rurnl America: Recommendations for a National Strategy:' Omaha, Nebraska. August 1988.*
United States Department ofConunerce. Bureau of Economic Analysis. "Regional Multipliers: A User H~mdhook for the Regional Input-Output Modeling System (RIMS lI)." 1986.**
Walden. Michael L. "A Note On Benefit And Cost Estimates In Publicly Assisted Housing." Journal of Regional Sdence. 191<1. v21(3), pp. 421-424.*
Warhurton. S. and Tro~er-Foyan. M. "Rural Public Transport Need. Demand. and Provision: An Overview." Newc~L<;tk Upon Tyne University Tr~msport Operations Research Group. N~wca<;tle Upon Tyn~. Engtmd. 191<1. [NTIS PBX4-126lUI]...
Watterson. W. T. "Estimating Economic and Development Impacts of Transit Investments." Transportation R~se~trch Record 1046. pp. 1-9.*
W~ishrod. Gkn E. ~md Beckwith. James. "Me~L<;uring Economic Development Benefits for Highway Del:ision Making: The Wisconsin Case." 1992. Transportation Quarterly. v46( I). pp. 57-79.*
Wheat. Leonard F. "The Effect of Modem Highways on Urh~m Manufacturing Growth." Highway Res~trch Record 277. pp.9-24.*
Wilhur Smith Associates. "Guid~ to the Economic Evaluation of Highway Projects." Iowa Department of Tr:mportation. ll)lJ3. *
Wilhur Smith Associates. "Impacts of the Pee Dee Regional Transportation Authority on the Florence Urh:m Area:' Prepared for the Pee Dee Regional Transporultion Authority, Florence, South Carolina.
19l)().*
Wilson. Fmnk R.. Stevens. Albert M.. and Holyoke. Timothy R. "Impact of Tmnsport.1tion on Regional Development." TransporL1tion Research Record 851. pp. )3-16.*
Wilson. Grahmn. G. M.. and Aboul-EL1. Mohamed. "Highway Investment as a Region.ll Development Policy Tool:' Tr.m~1'0rt.1tion Research Record 1046. pp. 10-14.*
Wisconsin Department of Trnnsport.1tion. "Economic Development Forum." WiSt:orL<;in Translin.ks 21. Fehruary IlJlJ4. *
A-4

Wisconsin Department of Transportation. "Transportation and Economic Development: A Swnmary of the Key ISl)'Ues Being Explored on Transportation Options and Economic Development." Wisconsin
Tmnslinks 21. February 1994.*
Wi<;consin Department of Transportation and the Federal Transit Administration. "Milwaukee East-West Corridor Transit Study: Alternatives An..l1ysis and Draft EnvirorunentalImpact Statement - Land Use
Results Technical Memorandum." March 1994.*
Wisconsin Department of Transportation and the Federal Transit Administration. "Milwaukee East-West Corridor Transit Study: Alternatives Analysis and Dmft Envirorunentallmpact Statement - Special Employment Analysis Results Technical Memorandum." May 1994.* Witkowski. Jtunes M. "Benefit Analysis for Sketch Planning of Highway Improvements." Transportation Research Record 1116. pp. 48-55.*
A-5

General Economic Impact of Public Spending Literature

Notations:

*

Copy obtained

** Copy not obtained due to size of document. availability. cost of duplication. etc.

Barth. James R. and Joseph J. Cordes. "Substitutability. Complementarity. And The Impact Of Government Spending On Economic Activity," Journal of Economics and Business, 1980, v32(3), 235242.*
Eisner. Roben. "lnfrastructw'e and Regional Economic Performance: Comment." New England &:onomic Review. Sept. 1, 1991. p. 47.*
Fox. Willi:un F. and Smith. Tim R. "Public Infrastructure Policy and Economic Development." Economic Review. March 1. 1990. v75(2). p. 49.*
Grigg. Neil S. "Infrastructure:;1 More Comprehensive Policy is Needed." Journal of Professional Issues in Engineering Education :md Practice. 1994. v120. 183-192.**
Grigg. Neil S. "Infrastructure and Economic Development: Civil Engineering Perspective." Journal of Professional Is~;ues in Engineering Education and Practice. 1993, v119. 51-61.**
Hoehn. John P. ;md AI:m R;md.'l11. "Too M:my Proposals Pass The Benefit Cost Test" American &:onOlnic Review. 1989. v79(3). 544-551.*
Johnson. M:mueJ H. and J:unes T. Bermett. "Regional Environmental And Economic Impact Evaluation: An Input-Output Approach." Regional Science and Urban Economics. 1981, vi 1(2). 215-230.*
McDennoll. Kevin M. "Reinventing the Infrastructure:' D & B Reports. Septemher/Octoher 1992.2023.*
Moonasingha An:mda D.. Tufte. Erling A.. and Grigg. Neil S. "Infrastructure and Economic Development: Civil Engineering Perspective." Journal of Professional Issues in Engineering Education :mtl Practice. IlJl)4. v120.232-235.**
Munnell. Alicia H. "Policy Watch: Infrastructure lnvesonent and Economic Growth." Journal of Economic Perspectives. 1992. v6(4). 189-198.*
Munnell. Alicia H. :md Cook. Leah M. "How Does Public Infrastructure Affect Regional Economic Pert"orm:mce'!" New Engl:md Economic Review. Sept. I. 1990. p. 11.*
Palumbo. Genrge. "An &:onomic Analysis: The Impact Of Public Employment Growth:' Growth and Change. IlJ82. v13(1), 37-45.*

A-6

Multipliers in Regional Economic Impact Analysis Literature

Notntions:

*

Copy obtained

*.

Copy not obtained due to size of document. availability, cost of duplication. etc.

Crihfield. John B. and Cambell. Harrison S., Jr. "Evaluating Alternative Regional Planning Models," Growth and Change. Spring 1991, v22, 1-16.*
Esparza. Adrian. "Defense Impact Analysis Within a Social Accounting Framework." Growth and Change. Summer 1989, v20. 63-80.*
United St.lles Department of Conunerce. Bureau of Economic Analysis. "Regional Multipliers: A User Handhook for the Regional Input-Output Modeling System (RIMS II)," 1986."

A-7

Economic Impact of Services Literature
Walden, Michael L. "A Note On Benefit And Cost Estimates In Publicly Assisted Housing," Journal of Regional Science, 1981, v21(3), 421-424.*
A-8

Tnmsportation Economic Impacts Literature

Notations:

*

Copy obtained

** Copy not obtained due to size of document. availability. cost of duplication. etc.

Beemiller. Riclwd M. "Hybrid Approach to Estimating Economic Impacts Using the Regional InputOurput Modeling System (RIMS II)." Transportation Research Record 1274. pp. 89-96.**

Beimbom. Edward and Horowitz. Alan. "Measurement of Transit BenefiiS." U.S. Depamnent of Transpon.1tion. June 1993.*

Bell. Mkhael and Feitelson. Eran. "Bottlenecks and Flexibility: Key Concepts for Identifying Economic Development Impacts of Transportation Services." Transportation Research Record 1274. pp. 53-62.**

Benel!. Dave W. and Prentice. Barry E. "A Regression Model for Predicting the Economic Impacts of Canadian Airports." Logistics and Transpon.1tion Review. 1993, v29(2), 139-158.*

Braun. Bradley M. "Measuring the Influence of Public Authorities Through Economic Impact Analysis: The C:L...e of POrt Canaveral." Policy Studies Journal. 1990. v18(4). 1032-1044.*

Briggs. Ronald. "Interstate Highway System and Development in Nonmetropolir.1n Areas." Transportation Research Record R12. 9-12. *

Brisson. Jeffrey. "The Role of Specialized Transpon.1tion in Job Development and Training: a Case Study of the City of Hartford's Employment Transpon.1tion Service." Presented at the Tenth National Conferem:e on Specialized Transportation. Sarasota. FL. November 1985.*

Brown. Neal A. "Rural Mass Transpon.1tion Feasibility Study:' Bluegrass Area Development District. Inc. Lexington. KY. 1973. [NTIS PB-241 lR6/6]**

Buffington. J. L.. Crane. L. Moo and Salleh. R. "Estimated Economic Impact of the Proposed Improvement of State Highway 199 in Tarrant County. Texas." Texas Transpon.1tion Institute. College Swtion. TX. IlJ91. [NTIS PBY3-112126/XAB]**

Butler. Stewart E. and KierruUl. LlUrence J. "Measuring the Regional Tr.Ulspon.1tion Benefil~ ~Uld ttonomic Impacts of Airports." Transportation Research Record 1116. pp. 63-69.*

California Tr:Ulsit Association. "California's Public TT"dllSportation Operators: Analysis of Projected F~Ulcial Needs .Uld SolutioTL...." 1993.*

Cmnhridge Systematics. lnl.:. "Highway 29/45 Study: Technical Reports on Localized Impacts." Prepared for the Wisconsin Depamnent of Transportation. March 19R9.*

C.unhridge Systematics. Inc.. et al. "Highway 29/45 Study: Economic Development Benefits and CostBenefit Evaluation." Prepared for the Wisconsin Depamnent of Transpon.1tion. March 198Y.*

Cervero. Robert. "Perceptions of Who Benefits From Public Transit." Transportation Research Record lJ3(-,.15-1lJ.*

Chapell. Charles W.. Jr. "Rural ~Uld Small City Transportation Research ,Uld Technology Tr:Ulsfer-The Feder:11 Outlook." Washington Sr.1te University. Pullman. WA. 19R5.**

A-9

Cook. Peter D. and Cook. Cynthia C. "Methodological Review of Analyses of Rur.u Tmnsportation Impacts in Developing Countries." Transponmion Research Record 1274, Pl'. 167-178.**
Drew. Dona.ld R. "Overview of Methodology (Tr.l1lsportation and Economic Development)." TTlUlsponation Research Record 1274, 1990,281-284.*
Eagle. David and StephtUledes, Yorgos J. "Dynamic Highway Impacts on Economic Development." Trnnsponation Research Record 1116, 1'1'.56-62.*
Floyd. Charles F., Row::Ul, Michael J. Kau, James B., and Maggied. Hal S. "The Development of a Transport.'ltion PI::Ullling Land Use Model." University of Gwrgia Department of Real Estate and Urban Development. Athens. GA, 1978. [NTIS PB-292 332/4]**
Forkenbrock. David J. "Putting Transport.1tion and Economic Development into Perspective." TTlUlSpOTttltion Research Record 1274, 1'1'.3-11.**
Frava1. F. D.. Burkhardt. J. E.. and Menzer. R. E. "PI::Ullling Techniques for Intercity TranSpOTttltion Services." Ecosometrics. Inc. BethesdtL MD. 1987. [NTIS PB89-17422l]**
Gaegler. Annelle M.. M:trch. James W.. and Weiner. Paul. "Dynamic Social and Economic Effect, of !.he Connecticut Turnpike." TTlUlsportation Research Record 716. 28-32.*
Graehner. Linda S.. et .'II. "The Local Implications of BART Development, Booz Alkn c:ind Hamilton. Inc.. U. S. DOT/U. S. HUD. Washington. DC. April 1979. [NTIS PB~1 1HW69]**
Greene. Michael J. "Coordin.1ting Rural Transit: Stretching State Resources for Bener Service." Lexington. KY: The Coum:il of Stme Government'i. 19R7.**
Hart. T. "Tnmsport Invesnnent and DisadvC:Ull.1ged Regions: U.K. and Europe::Ul Policies Since !.he IlJ50\." Urhan Studies. Mc:trch 19lJ3. v30(2). 417-435.*
H:U1gen. David T.. Stuart. Alfn:d W.. Walcott. Wayne A.. and Clay. Jrunes W. "Role of Transportation in Manufacrurers' Satisfaction with Locmions." TTlUlSpOTttltion Research Record 1274. 12-23.*
Hauser. Edwin W.. Rooks. Elizabeth H.. Johnston. Steven A.. and M::lcGillivray. Lois. "The Use of Existing Facilities for Tnmsporting DisadvC:Ultaged Residents of Rural Are::tS." Rese::trch Tr~mgle Institute. Rese:trch Tri:mgle Park. North C:trolina. 1975. [NTIS PB-248 747/8]**
J:tra-D~lZ. Sergio R. "On The Relation Between Users' Benefits And The Economic Effects Of Tr:UlSPOTttltion Activities." Journal of Regional Science. 1986. v26(2). 379-392.*
Joh:msson. B. "InfrC:L<;trucrure Accessibility and Economic Growth:' International Journal of Tnmsport &:onomy. June 1993. v20(2), 131-156.**
Jones. Kimherly. Sloggell. Gordon. Doeksen. Gerald A. LaRue. Ken. and Smith. Bettie. "An Economic Analysis of a Public TTlUlsport.1tion System Serving Seminole County in Oklahoma," Rural Development Coopemtive Extension Service. Oklahoma State University. November 1992.*
Kahn. Quaiser M. "Tnmsaction Costs Approach for Estimating Development Benefits of Rural Feeder Roads." TTlUlsportation Rese<trch Record 1274. Pl'. 202-210.**
Kidder. Alice E. "Economics of Rural Puhlic Transport.1tion Programs." Tnmsport.1tion Research Record 57R.1-7.*
A-IO

Kukla. Francis P. "The Impact of the Genesee County Airport on Genesee County," Transportation Rese:lfch Record 1025, 1-19....
L.1porte. T., Rosenthal. S., Lee. K. N., and Levine. E. "Interactions of Technology and Society: Impacts of Improved Air Transport. A Study of Airports at the Grass Roots." University ofCalifomia. Berkeley. Institute of Governmental Studies, Berkeley. CA. 1977. [NTIS N77-31005/0] ......
Leonard. Kenneth J. "Economic Impact of Wisconsin's Transportation Economic Impact Program." Transportation Research Record 1274, PI'. 270-280.......
Lionjanga. A. V. and Raman, V. "Transportation and Economic Developmem in Botswana: A Case Stucy," Transportation Research Record 1274, PI'. 211-222.......
McF'lfland. WiJli,trn F. and Memmott. Jeffery L. "Ranking Highway Construction Project..: Comparison of Benetit-Cost Analysis With Other Techniques:' Transportation Rese.1rch Record I I 16. pp. 1-9.*
Metropolitan Tr,Olsportation Commission. U. S. Deparunem of Transport.1tion. "BART in the S,Ol Fr'Olds<.:o Bay Area The Final Report of the BART Impact Progntrn," June 1979. [NTIS PBXI 107674]**
Morrall. J. F. ,Old Ahdelwahab. W. M. "Estimating Traffic Delays and the Economic Cost of Recurrent Road Closures on Rural Highways," Logistics ,Old Transport.1tion Review. 1993. v29(2). 159-177.*
Nesius. Ernest J. "Publi<.:Supported TrcUlSport.1tion for Rural Areas .. A Study of Mongolia County. West Virginia." West Virginia University Agricultural and Forestry Experiment Station.. Morgantown. WV. IlJ76. [NTIS PB-26X 723/4]**
Neuwirth. Roanne. "Ewnomic Impacts of Transit on Cities," Tr'U1Sport.1tion Research Record 1274. pp. 142-4lJ.**
Oklahoma State University. "A Guidehook for Rural Public Tr.msit Services." Agricultural Experiment St:uion. Division of Agriculture. Oklahoma State University. 1987.*
Pennsylvania Association of Municipal Transport.1tion Authorities. "M.1Ss Transit ,Old EconOlnic Development in PerUlsylvania." IlJ88.*
Perera. Max H. "Fnunework for Classifying ,Old Evaluating Economic Impacts Caused by a Transponation Improvement," Tmnsponation Research Re<.:ord 1274. Pl'. 4 I-52. **
Rephann. T. 1. "Highway Investment and Regional Economic Development: Decision Models and Empirical Found.1tions." Urb,Ol Studies. M.1rch 1993. v30(2).437-450.*
Ring. S. L.. Millett. M. L.. Carstens. R. L.. Meeks. H. D.. and Thompson. W. H. "Integrated Analysis of Small Cities Intercity Transportation to Facilitate the Achievement of Regional Urban Goals. Intercity Tr,Olsportation in Rural Regions: Volwne I Inventory and An.l.lyses." Iowa State University Engineering Research Institute. Ames. Iowa. 1975. [NTIS PB-254 930/1]*'"
Round Table on Tmnsport Economics. "Public Transport in Rural Areas: Scheduled and NonScheduled Servi<.:es," Repon of the Sixty-Fifth Round Table on Tnmspon Econ,)mics. Fehruary 19X4.**
Rucker. George. "Public Transport.1tion: Another Gap in Rural America," Transport.1tion Quanerly. Juiy IlJ!<4. v3!\(3).4llJ-432.*
A-ll

Stlte of California Depcl1'1JTlent of Transport.'ltion. Division of McL<is Transportation. "Transportation Development Act." Janu.uy 1994.*
Stephanedes. Yorgos J. and Eagle. David M. "Time-Series Analysis of Interactions Between Transport.'ltion and Manufacturing and Retail Employment." Transport.1tion Rese.1J'ch Record 1074. 1624.*
Stommes. Eileen S. and Be.1J'er. Martha A. "Annotated Bibliography on Rural Intercity Passenger TI"dllSport.1.tion." in Transportation Facts. August 1988, U. S. Deparonent of Agriculture, Office of TI".ulSport<ltion. *
Strahman. James G. and Dueker, Kenneth J. "Regional Economic Impacts of Local Transit Financing Alterru:ltives: Input-Output Results for Portland," Transportation Research Record 1116, pp. 40-47.*
U. S. Deparonent of Agriculture, Agricultural Marketing Service, Transportation and Marketing Division. "Transport.1.tion in Rural America: a Policy Backgrounder." Washington, D.C., April 1991.*
U. S. Department of Agriculrure. Office of Transport.'ltion. "Reconnecting Rural America: Recommend::uions for a Nariorul1 Strategy," Omaha. Nebraska.. August 1988.*
Vorhees and Associates. Inc. "An Evaluation of Rural Bus Service. City and County of Honolulu." McLean. VA. 1972. Prepared in Cooperation with Barton-Aschm.m Associates, Chicago, IL. [NTIS PB211 n6]**
Warhunon. S. and Trower-Foyan. M. "Rur.l1 Puhlic Transport Need. Demand. and Provision: An Overview:' Newcmale Upon Tyne University Transport Operations Research Group. Newcastle Upon Tyne. England. IlJRl. [NTIS PBlW-126101]**
Watterson. W. T. "Estimating Economic <md Development Impacts of Transit Investments." TranspoTtltion Research Record 1()46. 1-9.*
Weishrod. Glen E. and Beckwith. J.unes. "Measuring Economic Development Benetits for Highway Decision Making: The Wisconsin Case:' 1992. Transport.1.tion Quarterly. v46(1). 57-79.*
Wheat. Leonard F. "The Effect of Modem Highways on Urban Manufacturing Growth:' Highway Resean.:h Reconl 277. lJ-24. *
Wilhur Smith Assodates. "Guide to the El.:onomic Evaluation of Highway Projects." Iowa Department of Tr,mpoTtltion. 19lJ3.*
Wilhur Smith Associ.1.tes. "Impact" of the Pee Dee Regional Transport.1.tion Authority on the Florence Urban Area:' Prepared for the Pee Dee Regional Transportation Authority. Florence. South Carolina. ll)lJ(). *
Wilson. Fmnk R.. Stevens. Albert M. <md Holyoke. Timothy R. "Impact of Transport.1.tion on Region.1.l Development." Tr<mspoTtttion Rese<lfch Record 85 L 13-16.*
Wilson. Graham. G. M.. and Aboul-Em. Mohamed. "Highway Investment as a Regional Development Policy Tool." Transport.1.tion ReseclTch Record 1046. 10-14.*
Wisconsin Department of Traru.ll0rt.1.tion. "Economic Development Forum." Wisconsin Translinks 21. Fehru,lTY 1994.*
A-12

Wist:onsin Dep<Utment of Transportation. "Transportation and Economic Development: A Swrunary of the Key Issues Being Explored on Transportation Options and Economic Development." Wisconsin Trimslinks 21. February 1994.* Wisconsin Department of Transportation and the Federal Transit Administration. "Milwaukee E.1St-West Corridor Trimsit Study: Alternatives Analysis and Draft Environmental Impact Statement - Land Use Result~ Technical Memorandum." March 1994.* Wisconsin Department of Transportation and the Federal'Transit Administration. "Milwaukee E.1St-West Corridor Trcmsit Study: Alternatives Analysis and Draft Environmental Impact Statement - Special Employment Analysis Re~;ults Technical Memorandum." May 1994.* Witkowski. James M. "Benefit Analysis for Sketch Planning of Highway Improvements." Tmnsportation Research Record 1116. pp. 48-55.*
A-13

APPENDIXB
COUNTY CLASSIFICATION SYSTEM USED IN THE METHODOLOGY

COUNTY CLASSIFICATION SYSTEM USED IN THE METHODOLOGY
The classification system used in the methodology is found in Figure 2, "Georgia County Classification", on page 40 of the report. It was developed in part by Dr. Chris Nelson, and it was derived from U.S. census data and a previous work by Nelson et al. entitled Exurban Industrialization. Classifications are based on the definition of a Metropolitan Statistical Area (MSA) developed by the U.S. Office of Management and Budget. Current standards provide that each MSA must have at least (a) one city with 50,000 or more inhabitants, or (b) a CensusBureau defined urbanized area (of at least 50,000 inhabitants) and a total metropolitan population of at least 100,000 (Appendix II, 1996 Statistical Abstract ofthe United States, U.S. Bureau of the Census). The definitions of each classification shown in Figure 2, based on the preceding MSA definition, are given in the following paragraphs.
A. Major Urban Counties Major urban counties are the central, most populous counties of MSAs, and have populations over 500,000. The single Georgia county, based on 1990 data, classified as a major urban county was Fulton County. Although one other county had a population over 500,000 in 1990, it was, however, part of the Atlanta MSA and hence was not classified as major urban county.
B. Minor Urban Counties Minor urban counties are the central counties of other MSAs, ,rhere the central county population does not exceed 500,000. Georgia counties with this classiLcation in 1990, per Figure B-1 on page B-3, include Bibb, Richmond, Muscogee, Dougherty, Chatham, and Clarke Counties.
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C. Suburban Counties Suburban counties are all non-central counties in MSAs which were classified as metropoli-
tan in the 1960 U.S. census. Consequently, suburban counties, once classified as such, do not change their classification. Georgia counties classified as suburban include Cobb, Dekalb, Clayton, and Gwinnett Counties. By definition, suburban counties adjoin major urban counties, but they do not adjoin minor urban counties.
D. Inner Exurban In Exurban Industrialization (p. 12), Nelson et al. state that "Exurban counties may be inside or outside ofMSAs." All counties within MSAs not otherwise classified as major urban, minor urban, or suburban in 1990 are classified as inner exurban. Outer exurban counties are defined in Section E. The definitions of inner exurban and outer exurban were developed by Dr. Nelson.
E. Outer Exurban Exurban counties outside of MSAs are classified as outer exurban. Their status as outer exurban counties is determined based on the size of the MSA they adjoin as shown below: 1) For MSAs with populations under 1 million, outer exurban counties are non-MSA coun~ies within 60 miles of the outermost circumferential limited access highway or 70 miles from the center of the central city, whichever defines the larger area. In Georgia, this would presently include non-MSA counties within 70 miles of the city centers of Macon, Augusta, Columbus, Albany, Savannah, and Athens. 2) For MSAs with populations greater than or equal to 1 million, outer exurban counties are non-MSA counties within 80 miles of any circumferential limited access highway or 100 miles from the city center, whichever defines the larger area. For Georgia, Atlanta is currently the only MSA of this size, and several outer exurban counties are within 100 miles of its city center.
F. Rural Counties Rural counties are counties which are not otherwise classified as urban, suburban, or exurban.
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GEORGIA - Metropolitan Areas, Counties, and Selected Places

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LEGEND

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Meuoporrtan $1:.tistic:al ..... (MSAJ
Place of 250.000 Of'motelnhlbit.nls
'0 Place of 100.000 249.999 iMobitsn,s

@ P,.ce of 50.000 to 99.999 inhabit.nts



Piaca of 25.000 to 49.9991nhlibftants

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MSA central city of fewer than 25.000 inhabit.nts

Statl ClipCtll underlined

Metropolitan ..... bound.ries .nd names .re those defined by the Federal Offa of M.nagement .nd Budget on June 30. 1993. AU other
boundaries and N1tneS '1"1 .s of January 1. 1990.

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AUGUSTA-AIKEN

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ALABAMA 33"

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US. CEPAATJ.f'lT OF C()Mt,RCC Econotrics and Statistics Aarnstration &xeau of tile census

Figure B-1. Georgia Metropolitan Statistical Areas

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