MPC
Research Projects (2003-04)
Identifying Number
MPC-239
Project Title
Investment in Rural Roads: Willingness-to-Pay for Improved Gravel Road Services in Freight Transportation
University
North Dakota State UniversityProject Investigators
Tamara VanWechel
Upper Great Plains Transportation Institute
North Dakota State University
(701)231-6427
tamara.vanwechel@ndsu.edu
Kimberly Vachal
Upper Great Plains Transportation Institute
North Dakota State University
(701)224-5651
kimberly.vachal@ndsu.edu
External Project Contact
North Dakota DOT
Project Objective
Ascertaining information on user willingness-to-pay for improving service on gravel roads (i.e., paving) and user perceptions of funding for improving freight transportation services, such as road surface, safety, and maintenance, in rural areas.
Project Abstract
States that rely heavily on agriculture depend on rural roads for agricultural-related transport. Agricultural states like North Dakota are often home to grain processors that are vital to nearby rural economies. Thus, grain flow to these processors is an important issue. Roads surrounding the processing facility are more susceptible to damage from frequent use by heavy equipment and therefore, they need to be optimally maintained. Many rural roads used to transport grain to the processing facility are gravel. Gravel roads offer less ideal operating conditions for various reasons. They are often narrow, uneven, bumpy, and create low visibility due to dust build-up. Paved roads are convenient, not only for agricultural transportation purposes, but for general travel. However, more than 50% of the roads in the United States (1.6 million miles) are unpaved. These roads require much routine maintenance, yet some receive low service. Further, given the current transportation funding climate, it would be infeasible to publicly fund the paving of even the more frequently used gravel roads.
The changes in grain procurement logistics makes this an important research topic. Today many producers are bypassing small elevators and transporting grain longer distances by truck to terminal elevators and local processors. As producer marketing decisions shift traffic from rail to road, rural roads are wearing more quickly due to higher traffic flow. Freight transportation on rural roads is a critical issue, yet little research has been conducted regarding user perceptions of transportation service value and funding alternatives.
This study will focus on ascertaining information on user willingness-to-pay and their perceptions of funding for improving gravel roads which support freight transportation service in rural areas. The research will consider safety, road type, and maintenance valuation for both gravel and paved road surfaces. The results will be especially beneficial to rural states that are agriculture-based. It will include an assessment of the monetary amount the public is willing to pay for gravel roads and the amount they are willing to pay for paved roads. Determining the relative value of gravel roads and paved roads will be included. People will be asked to answer what they perceive their time is worth. Would they be willing to drive further if the roads were better?
As roads are a public good, user willingness-to-pay is not easily quantified. The research will be conducted in two phases: a user survey and an in-depth case study. A survey of rural road users (specifically agricultural producer-suppliers) will be used to estimate willingness-to-pay for alternative transportation services such as road surface type (i.e., paving), improving rural highway/rail intersections, increasing allowable vehicle weight, increasing vehicle operating speeds due to improved road surface, and improving roadway traffic control devices (signs). In addition, users will be queried regarding their views of road funding alternatives so "carrot" versus "stick" may be discussed. Road users will be characterized by factors such as vehicle-type, farm size, distance traveled, frequency of travel, and market proximity. The disaggregate investigation into WTP for rural road services will provide valuable insight for future research into rural freight transport.
In the proposed case study analysis, a cooperator-agricultural processor will be engaged in a study of producer-supplier transport decision-making. The case study will build on the information identified in the survey to obtain an in-depth understanding of user attitudes and how they influence their transportation decisions.
Task Descriptions
- Literature Review; A literature review on willingness-to-pay for public good markets.
- Develop a survey and define focus groups. Data will be collected on willingness-to-pay associated with current grain flow methods on rural roads.
- Administer survey. Establish a population from which to obtain a sample, and execute.
- Analyze data from surveys. Decipher optimum rural road services and financing methods for grain transporters.
- Conduct case study. Identify a North Dakota grain processing facility that can be studied in order to analyze investment in rural roads in greater depth.
- Compose MPC report.
- Present findings to interested parties.
Milestones, Dates
Starting Date: August 1, 2003
Ending Date: June 15, 2004
Student Involvement
Opportunity for a student to work between five and ten hours a week for approximately 6 months. He or she would work on compiling and sending out surveys, inputting data, word processing activities, and miscellaneous office duties.
Relationship to Other Research Projects
MPC Report No. 97-74 "Innovative Financing Methods for Local Roads in the Midwest an Mountain-Plains States." Hough, Smadi, and Bitzan. - The proposed study focuses on upgrading, improving, and maintaining rural roads to optimize benefits to users. MPC Report 97-74 describes various methods that could be used to obtain additional funding for such road activities. The results from this study will be helpful in addressing grain transportation to processors in the willingness-to-pay survey.
MPC Report No. 03-140 "An Assessment of Regional Road User Needs in Three Rural States". Hough, Hegland and Bahe. - This report summarizes perceptions of road users and decision makers in North Dakota, South Dakota, and Montana. This proposal stems from the needs of rural road users. The conclusions from this report will be helpful in creating a more specific survey for grain flow transporters.
MPC Report No. 99-102 "Guidelines for Consolidating Township Roads: A Case Study Showing Benefit/Cost Analysis for Closing Township Roads in North Dakota." Hough and Ova. - The proposed study will include a case study focusing on a North Dakota grain processor and related rural road use. Hough and Ova also use a North Dakota case study, including a survey to obtain data, as the research method. This will be useful as a guide as the proposed research develops.
Technology Transfer Activities
Final Report; Estimated user willingness-to-pay for rural road services for freight transportation; Analysis of rural road preference and the corresponding perceived value; Insight into user perceptions of funding alternatives for rural freight transportation.
Potential Benefits of the Project
Potential guide for local governments in rural road management; Use by state DOTs for planning purposes; Economic development strategies.
TRB Keywords
Willingness-to-pay (WTP), rural freight, grain, rural roads
