Pavement Repair Marginal Costs: Accounting for Heterogeneity Using Random-Parameters Regression

Highway agencies seek to establish road user cost responsibilities, in the form of marginal costs associated with the maintenance and rehabilitation (M&R) of their existing infrastructure, on the basis of lifecycle data on the infrastructure usage levels and repair costs. Due to the differences in physical characteristics and operational conditions across individual pavement segments, it can be hypothesized that the current practice, which imposes a uniform average user fee to cover repair damage of all pavements systemwide or within specific families, is not equitable. To address this issue, this paper assesses the marginal costs of pavement damage by accounting for segment-specific heterogeneity. To do this, the paper uses a random-parameters (RP) regression model. Through application of the developed model, the paper shows that the M&R marginal cost differs significantly across pavement segments. The results suggest that it is feasible for agencies to develop fee structures that charge different highway user fees for individual highway segments on the basis of the damage the users inflict to the pavement. This outcome can help agencies introduce more equitable charging for the use of their highways. (c) 2017 American Society of Civil Engineers.