Evaluating highway designs considering uncertain mobility patterns and flexibility using real options

Abstract

Determining how infrastructure corridors are to be optimally designed and modified over time is challenging due to the considerable uncertainty associated with potential changes in mobility patterns. This is because of factors such as the dynamisms of urban areas and the potential of transitioning to autonomous vehicles. Although currently this future uncertainty is taken into consideration in decisions with respect to highway designs and modifications in a qualitative manner, there is potential benefit to using quantitative methods and explicitly considering how highways may be modified in the future as a function of the actual future that emerges. In this article, the use of a quantitative evaluation method using real options is explored to evaluate highway designs, considering uncertainties in future mobility patterns and management flexibility. The usefulness of the method is investigated on the fictive but realistic case study based on the completion of the A15 highway, in the canton of Zürich, Switzerland. The results of this exploratory work indicate significant value in the use of the proposed method to ensure that infrastructure networks are optimally prepared to support society in an unknown future, and it is expected that it can be used more extensively in future spatial planning.