PL 71, Assessing Economic Impacts and Developing Improved Inflation Factors for Project Estimating

Abstract PL 71, Assessing Economic Impacts and Developing Improved Inflation Factors for Project Estimating PI: Bethany Paris Co-I: Bryan Gibson 07/01/26-05/31/27 Since the COVID-19 pandemic, inflation factors have exacerbated budgeting challenges across every space of the economy, from individual households to government agencies. These challenges compromise the budgetary bottom line for all agencies but have become especially challenging for multi-phase/multi-year projects, as prices are increasing faster than original budgetary allocations. Generating estimates that incorporate inflationary factors are key in aligning estimates, allocated dollars, and corresponding expenditures. This project will focus on creating a set of inflationary factors and/or a calculator that can be used for each project phase to reduce the difference between the project estimate, allocated monies, and those expended during future phases of projects. Infrastructure investments are assumed to be positively correlated with growth on an eternal trajectory, with this assumption lying in the adage: “if you build it, they will come.” However, a cautionary tale also lies within these assumptions, as investment in improving and developing new roads may detract from other publicly funded projects that could potentially benefit a local population. To assess the economic impact of roads, one must first outline the factors of study that include inputs and outputs that can be monetized and used in analysis. Factors to measure: • Reducing congestion • Safety improvements (savings from crash reductions) • Maintaining current thoroughfares to reduce future costs of new construction • Increasing economic activities o New businesses o New homes o Access to additional services Before performing an economic assessment, we must identify when and where projects were proposed and when and if they were completed. After determining these baselines (proposal and completion), we can estimate economic growth in conjunction with the overall local impact of these projects. Objectives: • Provide a tool with industry-based data for KYTC use in estimating the cost of future projects, OR • Provide methods to improve economic impact assessment based on analysis of past projects.