Toll-managed lanes: A simplified benefit-cost analysis of seven US projects

Toll managed lanes are expressway lanes where tolls are used-often in combination with preferred access for high occupancy vehicles and other special traffic management techniques-to improve the highway's capacity, speed or reliability. Such lanes have become popular with transportation policymakers as a way of maintaining free-flowing traffic on certain sections of the highway while also, in some cases, financing the construction of new lanes in congested urban areas. This study examines whether toll-managed lanes are as beneficial as they are popular. The heart of the analysis is the application of a simplified social benefit-cost analysis (BCA) to seven projects. In brief, our results paint a complicated picture of toll-managed lane efficacy. Only two of the seven projects have benefit-cost (B/C) ratios above 1.0 using our base case assumptions about the value of travel time saved and the discount rate, although three others approach or exceed 1.0 with more optimistic but plausible assumptions. The most successful generate not only a significant savings of around 4-5 min per trip for motorists who switch to the managed lane but also smaller per-trip savings for the large majority of motorists who continue to use the general-purpose lanes. It is important to acknowledge, however, that these calculations depend upon some uncertain assumptions about the value of travel time savings and improved reliability.