Highway Costs and Efficient Mix of State and Local Funds

Journal of the Transportation Research Board, Vol. 1812, pp. 27-36, 2002

8 Pages Posted: 4 Feb 2008

See all articles by David Matthew Levinson

David Matthew Levinson

affiliation not provided to SSRN

Bhanu Yerra

University of Minnesota - Twin Cities

Abstract

Governments and transportation networks are both hierarchically organized. Some state governments finance most of their highways, whereas in other states similar roads are financed locally. Larger governments attain scale economies. However, they also tend to be more bureaucratic and have higher operating costs, all else being equal, because of problems such as span of control. A study was done to relate highway expenditures with the share of expenditure by state governments to determine how governments should allocate expenditure on all roads in a state. Highways are divided into two hierarchical classes (higher and lower), governments into two layers (state and local), and costs into capital and operations and maintenance. Regression models to predict different highway expenditures on each highway class as a function of utilization, capacity, and funding shares are estimated. It is found that there is a share of expenditures by each level of government for each highway class that results in a minimum expenditure for each funding category (capital and operations). That minimum is not very far from typical state and local mixes found in many states. The results can be applied in formulation of efficient network financing arrangements. Policies can be formulated that would help adjust the financial responsibilities of transportation networks between government layers.

Suggested Citation

Levinson, David Matthew and Yerra, Bhanu, Highway Costs and Efficient Mix of State and Local Funds. Available at SSRN: https://ssrn.com/abstract=1089106

David Matthew Levinson (Contact Author)

affiliation not provided to SSRN

Bhanu Yerra

University of Minnesota - Twin Cities ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
28
Abstract Views
457
PlumX Metrics