Wednesday, July 17, 2019

Mobile River Bridge Plan is Fatally Flawed: Reason 12

I submitted an independent review of the Supplemental Draft Environmental Impact Statement (SDEIS) to the Alabama Department of Transportation (ALDOT) on July 10, 2019. As of this writing, ALDOT has not acknowledged receipt of my report, containing 19 specific issues with the project's decision document. The SDEIS is the most important document pertaining to the project. The bridge and bayway replacement cannot go forward without it.

The document is fatally flawed.

Since ALDOT has neither publicly nor even privately acknowledged that they are aware of these 19 specific problems with their decision document, I am sharing them with you, one at a time.

Note: Comments 12-19 are all about the Traffic & Revenue Study, which is the key to how the toll structure was developed.  This is Economics 205 level stuff.

Comment 12: Value of time/willingness to pay is improperly estimated and therefore useless.

Basis: The Traffic and Revenue Study uses a contingent valuation method (CVM) to attempt to reveal consumers’ willingness to pay to avoid congestion.  CVM studies are notoriously difficult to conduct objectively and reliably and are most often used for small-scale projects or for preliminary investigations to determine whether additional investigations are warranted.

One difficulty in conducting a CVM study is attaining a representative sample of the population the analyst intends to model. This study contains no documentation of how the sample size or sample demographics were determined. This study provides no descriptive statistics and does not provide a margin of error for the topline figures or breakdowns by demographic. Accordingly, the reader cannot tell whether the survey’s sample is representative of the population being modeled. One could suspect that the sample was selected because it was most beneficial to the analyst’s desired outcome. Such appearances must be carefully avoided.

Assuming one has a representative sample, it must be surveyed with an unbiased survey instrument that does not lead respondents in any direction (i.e., leading towards favoring or opposing a particular project or alternative). There are numerous sets of examples and guides on designing an unbiased survey instrument, including a comprehensive collection of example questions recommended by the U.S. Office of Management and Budget for use in federal projects that may come before OMB for consideration for inclusion in the President’s budget. This study does not provide copies of the survey instrument, so the public cannot determine whether its questions are biased or unbiased.

Care must be taken in survey administration to screen for strategic bidding in survey responses. Generally (but not always), strategic bidding falls into two categories: the ‘free rider” response and the “altruist” response. The free rider pretends not to value the resource or good/service in the hopes that he/she will get the benefit for free and will place zero or mere token value on it. The altruist values societal benefit more than his own satisfaction and pretends to place greater value on the resource, giving it an inflated value. It is not acceptable to simply assume that the two strategies cancel each other. There is no indication that the T&R Study recognizes the problem of strategic bidding and does not provide assurance that it has been addressed.

There is no evidence that the sample is representative, that the survey is unbiased, or that strategic bidding has been accounted for and addressed.

A travel cost method using actual and forecast travel rates along with published statistics on vehicle operating costs would transparently estimate the actual value of a trip on the existing Bayway and its alternatives. However, no method other than a CVM was contemplated for this study.

Without resolution, this issue could halt finalization of the SDEIS.


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