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The application of benefit–cost analysis principles by the Federal Aviation Administration (FAA) to a major infrastructure investment proposal – the expansion of Chicago O’Hare International Airport – is analyzed. The City of Chicago is proposing a major physical expansion of O’Hare Airport, which is but one of the alternative solutions to the high level of passenger delays that are currently experienced. The FAA must approve benefit–cost analyses done by the City in order for it to be eligible for federal funding. In the course of this process, the City has prepared two alternative benefit–cost studies of the proposed expansion. The analytic framework and empirical approach of both analyses is described, the results summarized, and the methods and estimates critiqued. It is concluded that neither study provides an estimate of net national benefits that meets minimal accepted professional standards. Finally, an overall assessment of the federal government process in considering and approving benefit–cost studies is provided, and suggestions for improving this process are offered.

This paper presents models for evaluating effects of implementing TDM schemes on road traffic with the consideration of uncertainty of travel times. The models are composed of drivers' behavioural model for identifying the optimal starting time and route with the designated time for arrival at the destination as well as dynamic traffic simulation model for estimating the change of travel times. A case study for applying the models on a test road network showed that TDM schemes of park and ride systems and road pricing enabled drivers to obtain benefits by improving the reliability of travel times as well as benefits by reducing travel times.