Incremental B/C Issue with Champion Defender process may have needed some parallel other examples or more discussion - I better get
the Economic Analysis Text back out - although in a cost constrained world an alternative that is superior from IBC but costs 250X
more per mile - may be beyond what can be programmed and one would tend to treat 2000 miles versus just 10 miles.
provides quite a bit of flexibility in doing your analysis. For example, you can use any benefit-cost ratio you like since many
agencies require a BCR of 2, 4 or even higher to consider a project viable. Also, RSAPv3 predicts the number of crashes so you
can also base your decisions on crash frequency.
The "Do Nothing" alternative costs the AGENCY nothing. The societal cost
is about 7 million dollars per fatality.
In the webinar example, the do-nothing alternative costs the agency nothing but results in
annual societal crash costs of about $453,000.
You speak of a "defender-challenger" analysis. Are you indicating
that an incremental benefit-cost analysis is being done?
Yes, a defender-challenger analysis is exactly the same thing as an incremental
benefit-cost analysis. The defender-challenger language is just an easy way to understand the process.
Why would you select
the option with the lowest bcr?
Referring to Seminar Slide #53, while 1.91 ( Alternative 4 with respect to Alternative 3)is the smallest
number in the table, it is not best choice. The highest BCR with respect to Alternative 1 (i.e., do nothing) is Alternative
2 (a w-beam guardrail) with a BCR of 11.8. What the 1.91 value indicates is that it is still cost beneficial to install a TL5
median barrier with respect to a TL4 — even though the number is getting smaller you get more benefit from the TL5 than the increase
in construction cost between a TL4 and TL5 median barrier. By the way, if your decision BCR (i.e., the BCR the agency requires
to consider doing a project) were 4, which is not unusual, the selected “best” alternative would be Alternative 3, the TL4 median
For comparison, what is the total annual cost associated with the alternative. Would one arrive at the same answer by
looking just at the total annual cost?
You can find the annual cost summaries in the Segment Report (see Seminar Slide #58).
The annual crash cost is lowest and the annualized construction cost is highest for Alternative 5. There are alternatives
to using a BC approach. For example, you can use a risk-based approach where you set a maximum average annual crash cost regardless
of construction costs. In the example, if your policy is to not accept alternatives that result in an annual crash cost of more
than $100,000 /1,000 ft Alternative 5 would still be your choice. If you were willing to accept as much as $200,000/1,000 ft
in crash costs Alternative 2 would be your choice. RSAPv3 is set up for benefit cost analysis but all the information (i.e.,
annual crash costs, construction costs, crash frequency, etc.) are all available for other types of decision making.