BACHELOR OF SCIENCE IN CIVIL ENGINEERING

CE 11 PRINCIPLES OF
TRANSPORTATION ENGINEERING

Engr. Hebe M. Cuenco-Uy, MECE

College of Engineering
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Learning Packet 4
UNIT 6:
TRANSPORTATION SAFETY AND ECONOMICS
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UNIT 6: TRANSPORTATION SAFETY AND ECONOMICS

6.0 Intended Learning Outcome

 Interpret issues on transportation safety and plans

 Identify transportation economics concepts and methods

6.1 Introduction

This unit discusses about transportation safety and economics. First it discusses about the
issues involved in transportation safety. Next, highway safety improvement program and
effectiveness of safety design features. Then, the economic importance of transportation.
Finally, the macroeconomics and microeconomics of transportation.

P RE – A SSESSMENT
Answer the following in your own perspective:

1. Discuss the significance of safety in transportation.

2. Define transportation economics.

Evaluation Criteria:

Quality/Craftmanship 40%
Creativity/Originality 30%
Effort/Perseverance 20%
Timeliness 10%
Total 100%

6.2 Topics/Discussion

As the number of motor vehicles and vehicle-miles of travel increases throughout the world,
the exposure of the population to traffic crashes also increases. Highway safety is a
worldwide problem; with over 500 million cars and trucks in use, more than 500,000 people
die each year in motor vehicle crashes, where about 15 million are injured. In the United
States, motor vehicle crashes are the leading cause of death for people between the ages of 1
to 34 years and rank third as the most significant cause of years of potential life lost—after
cardiac disease and cancer. In the United States, between 1966 and 1997, the number of
vehicle-miles traveled has increased from about one trillion to 2.6 trillion, whereas fatality
rates have declined from 5 per 100 million vehicle-miles to less than 2 per 100 million vehicle-
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miles. In 1998, there were approximately 40,000 fatalities on the nation’s highways—
compared with 55,000 in the mid-1970s.

All decisions related to planning, design, and improvement of transportation infrastructure

have economic implications. Transport economics includes the issues such as transport
location, movement of people and freight/goods, transport demand, transport planning and
forecasting, direct and indirect cost of transport, pricing of transport services, investments in
transport infrastructure and services, transport and social-economic development, and
transport regulation (Button, 2010).

6.2.1 Transportation Safety

Traffic and highway engineers are continually engaged in working to ensure that the street
and highway system is designed and operated such that highway crash rates can be reduced.
They also work with law-enforcement officials and educators in a team effort to ensure that
traffic laws, such as those regarding speed limits and drinking, are enforced, and that
motorists are educated about their responsibility to drive defensively and to understand and
obey traffic regulations.

6.2.1.1 Issues Involved in Transportation Safety

Several issues are involved in transportation safety. These include whether accidents should
be referred to as crashes, the causes of transportation crashes, and the factors involved in
transportation crashes.

Crashes or Accidents

“Accident” is the commonly accepted word for an occurrence involving one or more
transportation vehicles in a collision that results in property damages, injury, or death.
The term “accident” implies a random event that occurs for no apparent reason other
than “it just happened.” Have you ever been in a situation where something
happened that was unintended? Your immediate reaction might have been “sorry, it
was just an accident.”

In recent years, the National Highway Traffic Safety Administration has suggested
replacing the word “accident” with the word “crash” because “crash” implies that the
collision could have been prevented or its effect minimized by modifying drive r
behavior, vehicle design (called “crashworthiness”), roadway geometry, or the
traveling environment. The word “crash” is not universally-accepted terminology for
all transportation modes and is most common in the context of highway and traffic
incidents. In this unit, both terms—“crashes” and “accidents”—are used because
while “crash” is the preferred term, in some situations the word “accident” may be
more appropriate.
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Causes Transportation Crashes

The occurrence of a transportation crash presents a challenge to safety investigators.

In every instance, the question arises, “What sequence of events or circumstances
contributed to the incident that resulted in injury, loss of lives, or property damage?”
In some cases, the answer may be a simple one. For example, the cause of a single car
crash may be that the driver fell asleep at the wheel, crossed the highway shoulder,
and crashed into a tree. In other cases, the answer may be complex, involving many
factors that, acting together, caused the crash to occur.

Most people know that the Titanic, an “unsinkable” ocean liner, went to the bottom of
the sea with nearly 1200 passengers and crew. Common belief is that the cause of this
tragedy was that the ship struck an iceberg. However, the actual reason is much more
complex and involved many factors. These include too few lifeboats, a lack of wireless
information regarding ice fields, poor judgment by the captain, an inadequate on-
board warning system, overconfidence in the technology of ship construction, and
flaws in the rivets that fastened the ship’s steel plates.

Based on these illustrations and other similar cases, it is possible to construct a general
list of the categories of circumstances that could influence the occurrence of
transportation crashes. If the factors that have contributed to crash events are
identified, it is then possible to modify and improve the transportation system. In the
future, with the reduction or elimination of the crash-causing factor, a safer
transportation system is likely to result.

Factors Involved in Transportation Crashes

While the causes of crashes are usually complex and involve several factors, they can
be considered in four separate categories: actions by the driver or operator, mechanical
condition of the vehicle, geometric characteristics of the roadway, and the physical or
climatic environment in which the vehicle operates. These factors will be reviewed in
the following section.

Driver or Operator Action

The major contributing cause of many crash situations is the performance of the driver
of one or both (in multiple vehicle crashes) of the vehicles involved. Driver error can
occur in many ways, such as inattention to the roadway and surrounding traffic,
failure to yield the right of way, and/or traffic laws. These “failures” can occur as a
result of unfamiliarity with roadway conditions, traveling at high speeds, drowsiness,
drinking, and using a cell phone or other distractions within the vehicle.

The Vehicle Condition

The mechanical condition of a vehicle can be the cause of transportation crashes.
Faulty brakes in heavy trucks have caused crashes. Other reasons are failure of the
electrical system, worn tires, and the location of the vehicle’s center of gravity.
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The Roadway Condition

The condition and quality of the roadway, which includes the pavement, shoulders,
intersections, and the traffic control system, can be a factor in a crash. Highways must
be designed to provide adequate sight distance at the design speed or motorists will
be unable to take remedial action to avoid a crash. Traffic signals must provide
adequate decision sight distance when the signal goes from green to red. Railroad
grade crossings must be designed to operate safely and thus minimize crashes
between highway traffic and rail cars. Highway curves must be carefully designed to
accommodate vehicles traveling at or below the design speed of the road.

The Environment
The physical and climatic environment surrounding a transportation vehicle can also
be a factor in the occurrence of transportation crashes with the most common being
weather. All transportation systems function at their best when the weather is sunny
and mild and the skies are clear. Weather on roads can contribute to highway crashes;
for example, wet pavement reduces stopping friction and can cause vehicles to
hydroplane. Many severe crashes have been caused by fog because vehicles traveling
at high speeds are unable to see other vehicles ahead that may have stopped or slowed
down, creating a multivehicle pile-up. Geography is another environmental cause of
transportation crashes. Mountain ranges have been the site of air crashes. Flooded
river plains, swollen rivers, and mud slides on the pavement have caused railroad and
highway crashes.

6.2.1.2 Highway Safety Improvement Program

The Highway Safety Improvement Program (HSIP) was developed by the Federal Highway
Administration (FHWA) with the overall objectives of reducing the number and severity of
crashes and decreasing the potential for crashes on all highways. The HSIP consists of three
components: (1) planning, (2) implementation, and (3) evaluation.

The planning component of the HSIP consists of four processes as shown in Figure 6.1. These
are (1) collecting and maintaining data, (2) identifying hazardous locations and elements, (3)
conducting engineering studies, and (4) establishing project priorities. Figure 6.1 shows that
the information obtained under the planning component serves as input to the two other
components, and that results obtained from the evaluation component may also serve as
input to the planning component.

(Please refer to the textbook “Traffic and Highway Engineering – Fourth Edition” by Nicholas J.
Garber and Lester A. Hoel, pages 155-190, for the complete discussion and examples on this topic.)

6.2.1.3 Effectiveness of Safety Design Features

The document, Guidance for Implementation of the AASHTO Strategic Highway Safety
Plan, published by the Transportation Research Board (TRB) consists of several guides, each
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of which gives a set of objectives and strategies to improve safety at specific locations. Table
6.1 gives some of these objectives and strategies for a few locations.

Figure 6.1
Highway Safety Improvement Program at Process Level

Table 6.1 Objectives and Strategies for Different Crash Types

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Table 6.1 Objectives and Strategies for Different Crash Types (continued)
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Table 6.1 Objectives and Strategies for Different Crash Types (continued)
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Table 6.1 Objectives and Strategies for Different Crash Types (continued)

6.2.2 Transportation Economics

Economics has been defined as “the study of how people and society end up choosing, with
or without the use of money, to employ scarce productive resources that could have
alternative uses to produce various commodities and distribute them for consumption, now
and in the future, among various persons and groups in society. It analyzes the costs and
benefits of improving patterns of resource allocation” (Samuelson, 1976). Transportation
refers to the movement of persons, goods and services from one point to another, with the
aid of fixed facilities and/or vehicles such as bridges, highway pavements, pipelines, aircraft,
etc. Transportation, from the economist’s viewpoint, may therefore be considered in terms
of either supply (the available quantity and quality of the fixed facilities and vehicles) or
demand (the “desire” of persons or goods to be transported and ability to pay for it).
Transportation economics can be described as the study of how scarce productive resources
are used to produce and distribute various transportation services for consumption by the
society.

In a macroeconomic sense, transportation activities form a portion of a nation’s total

economic product and play a role in building or strengthening a national or regional
economy and as an influence in the development of land and other resources. In a
microeconomic sense, transportation involves relations between firms and individual
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consumers. The demand for and supply of transportation for both passengers and freight,
transportation pricing, and the reasons why the transportation system is both regulated and
deregulated are among its concerns. Finally, the government’s involvement in each mode of
transportation differs. In some instances private enterprise is used; in others, government
provides the facilities and equipment, especially if the rationale for government involvement
is that a strong transportation system is necessary for developing the nation’s economy or
for its defense. Government’s involvement in transportation has both a macro- and a
microeconomic significance.

6.2.2.1 The Economic Importance of Transportation

The development of transportation systems takes place in a socioeconomic context. While

development policies and strategies focus on physical capital, recent years have seen a better
balance by including human capital issues. Irrespective of the relative importance of physical
versus human capital, development cannot occur without both interacting as infrastructures
cannot remain effective without proper operations and maintenance. At the same time,
economic activities cannot take place without an infrastructure base. The highly
transactional and service-oriented functions of many transport activities underline the
complex relationship between its physical and human capital needs. For instance, effective
logistics rely on infrastructures and managerial expertise.

Because of its intensive use of infrastructures, the transport sector is an important component
of the economy and a common tool used for development. This is even more so in a global
economy where economic opportunities have been increasingly related to the mobili ty of
people and freight, including information and communication technologies. A relation
between the quantity and quality of transport infrastructure and the level of economic
development is apparent. High-density transport infrastructure and highly connected
networks are commonly associated with high levels of development. When transport
systems are efficient, they provide economic and social opportunities and benefits that result
in positive multiplier effects such as better accessibility to markets , employment, and
additional investments. When transport systems are deficient in terms of capacity or
reliability, they can have an economic cost such as reduced or missed opportunities and
lower quality of life.

At the aggregate level, efficient transportation reduces costs in many economic sectors, while
inefficient transportation increases these costs. Besides, the impacts of transportation are not
always intended and can have unforeseen or unintended consequences. For instance,
congestion is often an unintended consequence in providing free or low-cost transport
infrastructure to the users. However, congestion is also an indication of a growing economy
where capacity and infrastructure have difficulties keeping up with the rising mobility
demands. Transport carries an important social and environmental load, which cannot be
neglected.
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Figure 6.1
Factors Behind the Development of Transport Systems

The economic importance of the transportation industry can thus be assessed from a
macroeconomic and microeconomic perspective:

 At the macroeconomic level (the importance of transportation for a whole economy),

transportation and related mobility are linked to a level of output, employment, and
income within a national economy. In many developed economies, transportation
accounts for between 6% and 12% of the GDP. Further, logistics costs can account for
between 6% and 25% of the GDP. The value of all transportation assets, including
infrastructures and vehicles, can easily account for half the GDP of an advanced
economy.

 At the microeconomic level (the importance of transportation for specific parts of the
economy), transportation is linked to producer, consumer, and distribution costs. The
importance of specific transport activities and infrastructure can thus be assessed for
each sector of the economy. Usually, higher income levels are associated with
a greater share of transportation in consumption expenses. On average,
transportation accounts for between 10% and 15% of household expenditures. In
comparison, it accounts for around 4% of the costs of each unit of output in
manufacturing, but this figure varies greatly according to sub-sectors.

6.2.2.2 The Macroeconomics of Transportation

Gross national product (GNP) expresses a nation’s total economic activities, of which
transportation forms a part. In the late 20th century in the United States, between 17 and 18
percent, or about one-sixth, is associated with transportation. The figure can be broken down
into passenger and freight transportation. About 11 percent of GNP is accounted for by
movement of people and about 6 percent by movement of freight. More than four-fifths of
expenditures for movement of people in the United States are associated with the private
automobile—its purchase, operation, and maintenance. About one-tenth of the expenditure
on intercity travel is for travel by air; the remaining tenth is spent for rail, taxi, transit bus,
and school bus. The vast majority (four-fifths) of money spent for intercity movement of
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Figure 6.2
Basic Location Factors

freight goes to highway carriers; rails receive only about one-tenth, and the remainder is
divided between air, water, and pipeline. It should be noted that more than four-fifths of the
expenditures for both personal and freight intercity transportation goes to highway users. In
economic terms, this represents by far the most important segment of transportation in the
United States. At one time, railroads were the most important, but their role has steadily
declined since World War I.

According to the United States Bureau of Labor Statistics, in 1989 the typical household spent
$27,810. Housing accounted for $8,609; transportation (mainly automobiles) accounted for
$5,187; and food accounted for $4,152. Looking at the age of consumers, those under 25 spent
the highest proportion of their income, after housing, on transportation; presumab ly much
of this went for automobiles and for automobile insurance premiums. By almost any
measure, the great significance of transportation to individuals and, aggregated together, to
society is apparent. Figures for the United States are not representative of the world.
Automobile ownership rates are not as high in other countries.

6.2.2.3 The Microeconomics of Transportation

Micro-economics is associated with the wealth of society on a regional scale, and deals with
the behavior of aggregate concepts. On the other hand, micro-economics involves the
behavior of relatively smaller entities such as firms and individuals.

Supply of Transportation

Transportation is supplied by individual firms of all sizes and by government

agencies. The range of government involvement differs by type, or mode, of
transportation and the geographic or political areas of jurisdiction. Governments are
involved in providing transportation because it is necessary for economic
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development, for carrying out certain other functions of government (such as

public safety or making it easier for individuals to reach schools or hospitals), and for
national defense.

In the United States, airlines are run as private firms, while airports and the air traffic
control network are supplied by government. Motorists and trucks operate in the
private sector and travel on highways provided by the public, largely through taxes
collected on motor fuels. Barges and Great Lakes carriers and oceangoing ships are
private-enterprise operations, paying low levels of user fees. They travel on
waterways improved and maintained by governments. Railroads are private-
enterprise ventures operating on their own roadbed and track. An exception is
intercity rail passenger service, which is provided by a government agency. Oil and
gas pipelines are operated by private enterprise. Mass transit operations carrying
large numbers of passengers in urban areas on buses, light rail vehicles, and ferries
are usually operated in the public sector. At one time mass transit was provided by
the private sector, but private firms could not survive much beyond World War II,
when automobiles became popular. Communities, later aided by the federal
government, bought out the declining private transit operators and replaced them
with public-enterprise operations. Vehicles, aircraft, and ships are usually built by
firms in the private sector.

Outside the United States, public ownership and operation of transportation is quite
common. Most nations own and operate their railroads and airlines. Automobiles
and trucks are built in the private sector, but roads are provided by the public. Ships
may be either publicly or privately owned, although virtually all nations subsidize
their merchant marine.

So, in the supply of transportation services, a mix of public and private entities is
usual. Private firms are responsive in situations where there is a profit to be made. If
the market will not support profitable operators, a variety of
government subsidization schemes are used. Ideal schemes allow the subsidized
operator to develop business to a point at which the subsidies are no longer needed.
Frequently this does not happen; the users—or the employees—of the carrier enjoy
the subsidies and assert political pressure on governments to maintain them.
Governments are confronted by groups who demand certain levels of transportation
service but are unable, or unwilling, to pay for them. Subsidized carriers then pursue
objectives that may differ from the aims of economic efficiency. This leads to a
redistribution of income from the general taxpayer to the user of the subsidized
transportation operation. Subsidized transportation also affects decisions made by
firms determining where to locate plants or by individuals determining where to
locate homes. Both groups in making these decisions attempt to minimize
transportation costs that they must pay. If the costs these groups must pay are not the
same as the true and total costs to society, the low-transportation-cost site in their eyes
is perhaps not the same as might be chosen by one knowing—or having to pay—all
transportation costs.
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Benefit-Cost Analysis of Public Transportation Projects

A form of investment analysis for long-range government investments is benefit-

cost or benefit-to-cost analysis. It is more widely used for transportation undertakings
than for other public-sector investments. Long-term projections of benefits and costs
are made. These future flows are then discounted, through use of a rate of interest,
back to the present value. (For example, using a 5 percent compound interest rate,
$1,000 10 years in the future is worth $614 today.) Costs of a project include land—
such as that needed for the right-of-way—site preparation and construction of the
facility. Future operating costs of the facility also must be considered.

Benefits are usually savings in travel time for passenger-oriented projects and savings
in transportation costs for freight. An example of this would be dredging a harbour.
If the plans would permit a larger vessel to be used, the costs per ton for shipping
would be lowered, and this would be considered a benefit. Benefit-cost analysis can
be applied to a variety of projects and, if similar assumptions are used in performing
the analysis for each, then the projects can be ranked in the order that should be used
for getting the greatest return for the governmental investment.

Demand for Passenger Transportation

In the United States, so much transportation is conducted with private automobiles

that passenger transport could almost be equated with automobile transport. The
most common trip is the journey to work, a to-and-fro movement 5 days each week,
50 weeks per year. The individual concerned may have chosen both a job and a home
while thinking of the daily journey that would have to be conducted between the two.
In the United States, the vast majority of journeys to and from work take place in
private automobiles, often with the driver alone, carrying no passengers. Car pools
are encouraged in most large urban areas by setting aside certain lanes on freeways in
and out of the city for use by vehicles carrying multiple passengers. On toll roads and
bridges, and at freeway entrance points, they may also receive preference.

There is also work-related travel, which may be conducted in any sort of vehicle. The
demand for such a trip must outweigh both the transportation costs and value of the
individual’s time spent while traveling. Some individuals travel in search of work.
There also are migrations of people from one part of the country to another, seeking a
job and a better life. There have been, and will continue to be, large migrations
throughout the world.

Travel to and from school is a regular movement for many people. Buses may be
provided by the school district, or public transportation may be used. Individuals also
need transportation for shopping, visits to doctors, visits to friends, and other personal
reasons. Some persons travel for religious purposes on pilgrimages to sites of special
significance. Vacation and pleasure travel form another demand for transportation
services.
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Individual demands for transportation can be aggregated into demands for larger
vehicles. Examples are commuter trains that operate near large cities or aircraft that
fly coast-to-coast or across the ocean. Most passengers have several alternative modes
of transportation or carriers from which to choose. A commuter may drive alone, be
part of a car pool or a vanpool, or ride on a bus, ferry, or train. Part of the person’s
decision as to type and size of vehicle is based on the value of his or her time and the
relative comfort and convenience associated with travel in each vehicle type.

Figure 6.3
a: Growth in Passenger and Freight Transport demand with GDP
b: Trends in modal share of intercity passenger travel demand between 1980 and 2010

Demand for Freight Transportation

Demand for freight transportation is generally a function of demand for a product. A

simple definition of demand for freight transportation is that it reflects the difference
between a commodity’s value in two different markets. If oranges are worth $4 a
bushel in Florida and $10 a bushel in Chicago, then the demand for transporting
oranges from Florida to Chicago is expressed as $6 a bushel. As oranges begin moving
from Florida to Chicago, the spread in market prices will start to decrease and will
eventually drop to the point where it no longer covers the costs of transportation.
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Freight is time-sensitive. Fresh seafood is perishable; newspapers must be delivered

promptly. Shippers have money invested in inventory and often want to use faster
modes of transportation to reduce the amount of time they must wait for payment.

For some goods, the cost of transportation is nearly the same as the cost of the product,
and it thus influences demand for both the product and its carriage. Steel-mill slag (a
by-product of the steel-making process) has almost no market value, and sometimes
steel mills must pay to have it carried away. It can be used as an aggregate in concrete
but competes with other materials, such as sand, which are very low in cost. Many
recycled products also have almost no market value, and transportation costs become
the major factor viewed by those who may want to buy the recycled products for some
subsequent use.

Video Lessons:

Top common causes of road accidents in India

https://www.youtube.com/watch?v=HU5UluU8c38

The Hidden Traffic Safety Solution: Public Transportation Final

https://www.youtube.com/watch?v=Tv5p9tAODFg

What is TRANSPORT ECONOMICS? What does TRANSPORT ECONOMICS mean?

https://www.youtube.com/watch?v=RY7H0UKcm7U

20 Year Passenger Forecast 2016

https://www.youtube.com/watch?v=Q4fH-Xsma38

P OST – ASSESSMENT
Answer the following in your own perspective:

1. Describe the factors involved in transportation crashes.

2. List down five (5) crash types and strategies to prevent or minimize these.
3. Discuss the role of transportation in nation’s economy.
4. Compare and contrast macroeconomics transportation from microeconomics
transportation.
5. Provide at least one solution for the increasing demand of people transportation and
freight transportation.
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Evaluation Criteria:
Quality/Craftmanship 40%
Creativity/Originality 30%
Effort/Perseverance 20%
Timeliness 10%
Total 100%

6.3 References

Garber, N.J. and L.A. Hoel. (2009). Traffic and Highway Engineering – 4th Edition. Cengage
Learning.

Shukla, Priyadarshi & Pathak, Minal & Mittal, Shivika & Dhar, Subash. (2015). Scenarios and
Roadmap for Intercity Transport in India: The Role of High Speed Rail.
10.13140/RG.2.1.2678.7287.

The Geography of Transport Systems [Online]

https://transportgeography.org/

Wood, D. (2021). Transportation Economics. Britannica [Online]

https://www.britannica.com/topic/transportation-economics

6.4 Acknowledgment

The images, tables, figures, and information contained in this module were taken from the
references cited above.
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