Puget Sound Regional Council

What Is Benefit-Cost Analysis?

Benefit-cost methods show the benefits and costs that accrue to society as a result of an action. The purpose of benefit-cost analysis is to compare the benefits of a policy or investment with the costs of implementing it. If the benefits of the project or policy exceed the costs, then there is an economic argument to make the investment or implement the policy.

How Is Benefit-Cost Analysis Used at PSRC?

Transportation planning decisions can involve large up-front costs, with benefits that play out over a long time. Regional planning agencies take this into account in their travel demand modeling practices. A natural extension of these modeling practices is accounting for benefits and costs to support decision-making. In Washington state, these methods fulfill regional planning requirements set out in state law under the term “least-cost planning.” PSRC has developed procedures and methods for transportation benefit-cost analysis.

  • Read more about PSRC’s benefit-cost analysis software tool.
    • PSRC commissioned the development of custom benefit-cost accounting software from the consulting firm ECONorthwest. The primary methods for estimation of user benefits that underpin the PSRC Benefit-Cost Analysis (BCA) tool are the same as those developed for AASHTO’s “Red Book” and those developed for a companion manual for estimation of transit user benefits.
    • The software developed by ECONorthwest makes use of standard data available in specially prepared travel model databanks from the regional travel demand model software, EMME/3. The databanks contain various trip cost, time, vehicle class and time of day information aggregated at either the origin-destination pair or links in the model network. This data is extracted and processed in a manner that permits consumer surplus and environmental benefit accounting when one model run is compared directly with the base case scenario. The benefit-cost analysis tool consists of a number of software elements written in the Python programming language. Data is processed and stored as schema in a Postgres relational database. Results are then compiled through a web-based (Django) user interface, with programmable input parameters, and then tabulated in .csv output files that can be opened directly with standard spreadsheet software.

Benefit-Cost Analysis reports from PSRC


Billy Charlton


Puget Sound Regional Council • 1011 Western Ave, Suite 500 • Seattle, WA 98104 • 206-464-7090