Modeling and Indexing the Cost of Highway Projects to a Responsive Highway User Fee

Abstract

Multiple variables affect the costs of highway projects and associated bid item prices. Such variables constantly change according to factors on the project, state, and national levels. In most states, the dependency on a fixed fuel tax does not link the actual funding cost of highway projects to fees collected from highway users. To establish a link between the highway user fee and the actual costs of highway projects, this research aims to establish a methodology to identify highly significant and influential bid items, quantify the factors affecting the cost of highway projects, develop a bid item price estimation model, and calculate a highway construction cost index. The research identifies significant bid line items and selects “bituminous material for tack coat” to illustrate the research process. The research models the relationship between the bid item price and multiple variables using multiple linear regression and time series analysis. The Fisher price index is used to calculate a highway construction cost index. As a result, the research develops a modeling and indexing approach that can be used to link the actual cost of highway projects to a highway user fee.