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Keywords:

  • meteorological information;
  • weather service;
  • road traffic;
  • economic stakeholders;
  • cost-benefit analysis

Abstract

  1. Top of page
  2. Abstract
  3. 1. Introduction
  4. 2. Material and methods
  5. 3. Results
  6. 4. Conclusions and outlook
  7. REFERENCES

Meteorological services involve the provision of information on the state of the atmosphere and the ground surface. They provide data, information, forecasts and various related products, which are important for the smooth functioning of many aspects of the economy, government and society. The economic value or benefit of weather forecasts consists in generally improving financial and related outcomes resulting from the use of such forecasts. The merit of meteorological services cannot directly be deduced from the consumption of services. Rather, it emerges from the improvement of decisions made by economic stakeholders thanks to weather-related information. This is the first empirical study on this topic for Switzerland which includes economic data from interviewed users. The results show that the use of meteorology in the road transportation sector in Switzerland generates an economic benefit to the national economy of 65.7–79.77 million Swiss francs (1 Swiss franc ∼0.90 €, 1.20 US$ as of August 2011). In relation to its budget the overall benefit to the national meteorological service might be several times that amount, considering that many other economic sectors such as agriculture, aviation, construction, energy, media and tourism were not included in this study. Furthermore, climate services were not taken into account in this study and, therefore, the economic benefit for the road traffic sector alone might in fact be even higher. Copyright © 2012 Royal Meteorological Society


1. Introduction

  1. Top of page
  2. Abstract
  3. 1. Introduction
  4. 2. Material and methods
  5. 3. Results
  6. 4. Conclusions and outlook
  7. REFERENCES

Road travel has become an essential component of daily life for many people throughout the world. In order to further their economy and social welfare many countries rely to a great extent on being able to move persons and goods on the road, a fact which underlines the importance of uninterrupted availability of the road network (Figure 1). The commercial transport industry relies heavily on the continuous use of highways throughout the year. The effectiveness of the industry now allows for just-in-time delivery in many businesses and markets, a business model which, without clear roads throughout the year, would result in a reduction or even cessation of plant operations. Public transportation such as bus, taxi and emergency services rely on clear roads year-round, as does private transport: many individuals rely on the road network to reach places of work and leisure in their own vehicles. Without an understanding and management of the roadweather interface and the presence of information systems to help identify appropriate action to take, the cost both financially and socially would be much higher and result in significantly more accidents and delays on the roads during the winter season (Thornes, 1989; Hanbali, 1994; Thornes and Stephenson, 2001; Almkvist et al., 2005).

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Figure 1. Economic contributions and social functions of road transport investments

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Weather information is valuable to the road management value chain, starting from planning, construction and operating of roads, yielding to value-added services to road users (Leviäkangas and Hietajärvi, 2010). The winter climate in many countries, as in Switzerland, necessitates significant investment for the prediction and subsequent prevention of snow and ice formation on roads and highways, so that users can travel safely and with minimum disruption.

The benefits of relevant meteorological information to different users have been studied, but a coherent view of the impact of meteorological information remains still outstanding (Freebairn and Zillmann, 2002; Leviäkangas and Hautala, 2009; Frei, 2010).

1.1. Meteorological information for road traffic

Various meteorological events can have an impact on road traffic. The main focus in this study is on weather conditions whose impact can directly be influenced by weather forecasts (e.g. snow). Additionally, only weather conditions which occur several times each year but which were not extreme events were taken into consideration. Therefore, the economic benefit of weather forecasts was analysed and evaluated for the following weather conditions:

  • snow liable to icing, and therefore possible closing of Alpine passes;

  • frost in combination with rain or humidity, making roads liable to icing, and,

  • heavy rain that leads to aquaplaning.

The meteorological information for road traffic can be divided into two categories: forecasts and alarms.

Forecasts contain information on meteorological parameters such as air temperature, amount of precipitation, cloudiness, dew point, humidity and wind. On the other hand, alarms are also available for slippery frost, hard-packed snow or freezing rain. The products are often available at different temporal and spatial resolutions and they are subject to the payment of fees. Alarms, however, are available free of charge on the website of MeteoSwiss and users can subscribe to updates by email or SMS.

2. Material and methods

  1. Top of page
  2. Abstract
  3. 1. Introduction
  4. 2. Material and methods
  5. 3. Results
  6. 4. Conclusions and outlook
  7. REFERENCES

2.1. Study design and stakeholders

The study was designed to include the public organizations which are responsible for road maintenance and, therefore, the security, capacity and disposability of the roads. On the other hand, public and private transport organizations, such as users of the roads, were also included.

Although the focus of the study was on the commercial use of the road network individual car traffic was also part of the analysis (Figure 2). The direct use of meteorological information by individual motor car traffic was not studied. However, a big part of the benefit for the individual motor traffic arises because traffic jams are reduced or prevented. Hence, the stakeholders in the study are the following:

  • public road maintenance services of national and regional roads, including sub-contractors (local roads were not considered);

  • national traffic management control centres which are responsible for the traffic management of all national roads;

  • freight transport companies with the following operations;

    • –transport of piece goods;

    • –logistics of supermarket chains (only one class of goods analysed);

    • –transport of fuel, and,

    • –transport of building materials;

  • public road transport;

    • –in agglomerations and cities, and,

    • –in rural areas;

  • individual traffic.

The use of meteorological information in connection with road traffic related to the transport of goods generates an economic benefit for the national economy which this study explores within four different dimensions:

  • increased profitability of companies which leads to an increase in the total value added for the economy;

  • less government spending due to resource-saving in the provision of public services (either directly through the public sector or indirectly through state-owned companies);

  • avoiding damage to infrastructure and equipment as well as avoiding health risks and personal injury, and,

  • individual benefits in terms of travel time savings.

The World Meteorological Organization (WMO) has recognized the importance of understanding how weather and climate information helps the various sectors of society to make decisions and reduce risks as well as outlining what changes would be needed to improve decision making (WMO, 2003, 2007). The aim is to increase further, in view of their growing value and impact, the utility of weather and climate knowledge for social and economic benefit. A process to raise awareness has been initiated regarding the issues at stake and it has created a dialogue among those involved: decision-makers at national level, users and the national meteorological services (Demuth et al., 2007; Morss et al., 2008).

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Figure 2. Model of the economic impact of meteorological services in the Swiss road transportation sector

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2.2. Methodology

There are different methodologies in order to measure the economic benefits of meteorological information. The most commonly used technique to estimate the value of meteorological information falls within the category of normative or prescriptive models. The approach in prescriptive models is to view meteorological information as a factor in the decision-making process that can be used by decision-makers to reduce uncertainty. In these models, decision-makers choose actions that either maximize expected profits or minimize expected costs, under conditions of imperfect knowledge about weather conditions (Gunasekera, 2004). Normative theories have been refined so that they better ‘describe’ decision making. Similarly, theories descriptive in nature have sought to introduce normative axioms. It is, however, important that the distinction between descriptive and normative remains clear: the distinction acts as a useful reference point when attempting to improve managerial decision making processes. A prescriptive model is one which can and should be used by a real decision maker and is tuned to both the specific situation and the needs of the decision maker. Prescriptive models are based on both the strong theoretical foundation of normative theory in combination with the observations of descriptive theory (Dillon, 1998).

The approach in the present study was to evaluate meteorological information with a prescriptive model in order to view meteorological information as a factor in the decision-making process.

In the present study for the assessment of the economic benefit from road traffic, 23 interviews with different partners were conducted: public road maintenance (10 interviews), private transport (9 interviews) and public transport (4 interviews). The interviews were conducted by a standardized questionnaire with 15 questions each and were complemented by a face-to-face discussion with the interview partners.

With regard to road maintenance services, the interviews were comprehensive and used as case studies. Table 1 indicates the number of questions relating to the individual topics of these case studies.

Table 1. Topics and number of questions for road maintenance case studies
Topics for road maintenance case studies Number of questions
Organizations of road maintenance units 18
Quality and impact of maintenance
services 8
On-site operations 8
Use of weather forecast for operations 9
Assumption: consequences if no weather
forecasts were available for operations 14

An important key element in the study is the definition of the reference condition for the estimation of the economic benefit. The reference condition is a situation where a forecasting system is available compared with a situation in which no forecasts are available, but all the other relevant influencing factors such as, for example, the quality of road maintenance remaining constant (‘ceteris paribus’)

3. Results

  1. Top of page
  2. Abstract
  3. 1. Introduction
  4. 2. Material and methods
  5. 3. Results
  6. 4. Conclusions and outlook
  7. REFERENCES

The study revealed that each road authority has a different transport infrastructure to manage, and no two areas face exactly the same weather conditions. Each authority has a different mix of people and equipment at their disposal, and levels of service differ between regions. As such, winter maintenance strategies are likely to vary to meet specific local challenges. However, as shown in Table 2, the findings of the study are nevertheless representative because 43% (36% + 7%) of the national road kilometres and 27% (24% + 3%) of the regional road kilometres were covered by the interviews. Table 3 gives a summary of the findings for the road traffic sector in Switzerland. A monetary quantification of the benefit of the meteorological information was possible for the two dimensions of avoided government spending and of additional value added. However, even in those two dimensions it was hardly possible to quantify every benefit. Therefore, the overall economic benefit to the national economy is, in reality, even higher than calculated here.

Table 2. Relationship between total road kilometers in Switzerland and road kilometers operated by the interviewed agencies
Type of roads Total kilometres in Switzerland Kilometres operated by seven interviewed agencies with monetary quantification of the economic benefit Kilometres operated by interviewed agencies with no possible monetary quantification of the economic benefit
National roads 1789 628 36% 119 7%
Regional roads 18 050 4243 24% 518 3%
Table 3. Summary of results for the road traffic sector in Switzerland
Benefit dimension (million CHF year−1) stakeholdersEconomic benefit to the national economy of meteorological information used by the stakeholders
Avoided governmental spending Additional value added Avoided damage costs Avoided individual travel time-costs
  1. The assessment of the impact and the quantifiability are based on the methodology used in this present study.

Governmental agencies
  Public road maintenance 41.8 2.4–8.5 Unknown impact, not quantifiable Unknown impact, not quantifiable
(incl. sub-contractors)
  National traffic management No effect No effect No effect Unknown impact, not quantifiable
Freight transport industry
  Transport of piece goods Low impact, not quantifiable No effect
  Logistics of supermarket 0.11–0.57 No effect
chains (only one class of
goods analysed)
  Transport of fuel Low impact, not quantifiable Low impact, not quantifiable
  Transport of building High impact, not quantifiable No effect
materials
Public road transport
  In agglomerations and cities High impact, not quantifiable High impact, not quantifiable No effect Unknown impact, not quantifiable
  In rural areas 10.8–14.6 10.8–14.6 No effect Unknown impact, not quantifiable
Total of quantifiable effects 52.6–56.4 13.3–23.7

3.1. Avoided government spending

The 10 interviews with different public road maintenance organizations as well as the four interviews with public road transport organizations indicated that they would have to spend significantly more resources for delivering their services in the same quality if no meteorological information was available. Where governmental agencies were concerned, the national traffic management was not able to quantify the avoided spending. Regarding public road transport, the avoided spending concerned predominantly rural areas since their heavy snowfall is a critical factor, whereas this is much less the case for agglomerations and big cities.

Based on the findings by the interviewed agencies (benefit of 4.6 million Swiss francs as shown in Table 4) it was possible to calculate the whole hypothetical monetary impact for those agencies which were not interviewed or which were not able to quantify the impact. As shown in Table 5 the governmental agencies save around 37 million Swiss francs for national and regional road maintenance. The extrapolation was done by calculating on the basis of kilometres that are maintained by the different road maintenance organizations.

Table 4. Hypothetical monetary impact of weather forecast unavailability on the amount of governmental spending for winter road maintenance on national and regional roads concerning the seven interviewed road authorities which were able to quantity the impact
Impact: Number of affected road authorities on national roads Number of affected road authorities on regional roads Average costs per year and road km (CHF km−1) Total costs per year (CHF year−1) (million)
  1. Two of the nine interviewed road authorities were not able to quantify the impact.

More personnel is needed because the operations 2 0 6400
are less predictable 1.85
More resources (personnel and vehicles) 1 2 840
are needed because more weather and road 2.48
observation have to be carried out
More operating hours for extra control drives but 1 1 200
no extra personnel is needed 0.315
Total national- and regional roads4.64
Total national roads2.00
Total regional roads2.64
Table 5. Hypothetical monetary impact of weather forecast unavailability on the amount of governmental spending for winter road maintenance on national and regional roads concerning the non-interviewed road authorities and the road authorities which were not able to quantify the impact
Assumption: One third of the non-interviewed road authorities…National roads Regional roads
Calculation CHF year−1 (Mio) Calculation CHF year−1 (million)
  1. Estimates are based on the interviewed road authorities capable of quantifying the impact.

… have to employ more personnel because the operations are less predictable 1/3 × 1161 km × 6400 CHF km−1 2.48 1/3 × 13 807 km × 6400 CHF km−1 29.45
… have to use more resources because more weather and road observation is needed 1/3 × 1161 km × 840 CHF km−1 0.33 1/3 × 13 807 km × 840 CHF km−1 3.87
… need more operating hours for extra control drives but no extra personnel 1/3 × 1161 km × 200 CHF km−1 0.08 1/3 × 13 807 km × 200 CHF km−1 0.92
Total 2.88 34.24
Assumption: All not-inter-viewed road authorities…
… have to employ more personnel because the operations are less predictable 1161 km × 6'400 CHF km−1 7.43. 13 807 km × 6400 CHF km−1 88.36
… have to use more resources because more weather and road observation is needed 1161 km × 840 CHF km−1 0.98 13 807 km × 840 CHF km−1 11.6
… need more operating hours for extra control drives but no extra personnel 1161 km × 200 CHF km−1 0.23 13 807 km × 200 CHF km−1 2.76
Total Summing not possible (double counting)

All in all it was possible to calculate that the governmental agencies (road maintenance and public road transport) can save around 52.6–56.4 million Swiss francs per year (Table 3) if contrasted with a scenario where the same services for road maintenance were provided without meteorological information. In this evaluation, local roads were not included, only national and regional roads.

As regards the national traffic management, no effect was found, and while the interviews with public road transportation services stated a high impact, it was not possible to quantify the impact in this study.

3.2. Additional value added

In the field of winter maintenance, governmental agencies sub-contract part of their work to third parties. These sub-contractors need meteorological information for their efficiency. Without meteorological information their contribution to the total value added of the Swiss economy would be lower by 2.4–8.5 million Swiss francs per year. A relevant additional value added of 10.8–14.6 million Swiss francs per year arises also in public road transport. This additional value was mainly generated in rural areas since their heavy snowfall is a critical factor, whereas this is also much less the case for agglomerations and big cities.

For some stakeholders the socio-economic benefit of meteorological information was low (transport of piece goods, transport of fuel) and for some stakeholders high (transport of building materials, public road transport) but in both cases it was not possible to quantify the effect.

3.3. Avoided damage costs

For some stakeholders (national traffic management, transport of piece goods, logistics of supermarket chains, transport of building materials, public road transportation) no effect of avoided damage costs were detected. For the two stakeholders public road maintenance and transport of fuel it was not possible to quantify the effects within this study. The scope of analysing the avoided damage costs would by far exceed the available possibilities of this study.

3.4. Avoided individual travel time costs

Since weather-related traffic jams are often caused by accidents on slippery roads, it was tried to quantify the effects by using the official road traffic accident statistics. However, it was not possible to demonstrate the expected effect in this study. For this reason, it was also not possible to show and quantify the benefit of meteorological information in terms of saving individual travel time. In all these cases the stakeholders were not able to describe the impact (unknown impact) and therefore also not able to quantify the benefit.

4. Conclusions and outlook

  1. Top of page
  2. Abstract
  3. 1. Introduction
  4. 2. Material and methods
  5. 3. Results
  6. 4. Conclusions and outlook
  7. REFERENCES

4.1. International comparison

There are different studies on economic benefits achieved by meteorological information for road traffic (Lazo and Chestnut, 2002; Danish Ministry of Transport and Energy, 2006; Leviäkangas et al., 2008; Leviäkangas, 2009; Leviäkangas and Hautala, 2009). Some of them pursue the objective of achieving the highest possible data collection rate. Some of them concentrate on a specific meteorological product, and others focus on certain stakeholders. Common to all the studies is the fact that snow and ice are considered to be the most important meteorological parameters for road traffic (Prusa, 2002). According to the work presented here this is also true for Switzerland.

A comparison between the different studies is, however, complicated by the fact that in each country where research was carried out the relevant infrastructure is in a different state and the public and private vehicles in use are not the same.

Studies by Leviäkangas (2009) for Finland and Croatia investigated the economic benefit based on the amount of salt saved, and found a much smaller effect than the one observed in the present study. This is explained by the fact that the results presented for Switzerland focus on savings in the field of human resources. These had a much bigger effect than just the salt savings. On the other hand, the current study did not consider the reduced expenditure for salt in contrast to the Finnish study.

A study by the Danish Ministry of Transport and Energy (2006) evaluated the benefit of meteorological information for different economic sectors, among them also public road maintenance. However, that study used a different reference condition. The results presented in a summary showed that an ice alert system and the corresponding forecasts yield a relevant economic benefit, mainly due to time savings.

The study of Lazo and Chestnut (2002) also had a different reference condition, since it investigated the economic benefit in terms of better and more precise weather forecasts. In addition, the geographical and climatological differences between the two countries are huge and it is therefore not possible to compare the results directly. However, the results of that study also confirmed a relevant reduction of damage costs due to meteorological information. The international comparison shows that the economic benefit caused by meteorological information for road traffic is relevant. However, due to different methodological approaches, no financial quantification is possible.

4.2. Integration of the current study into the relevant literature

In general, the demand for, and hence the value of, meteorological information, is influenced by its quality, accuracy, user-friendliness and timeliness. It is important to distinguish between studies whose aim is the economic valuation of meteorological information and ‘impact assessment’ studies. The former deal with the estimation of the economic value of specific types of meteorological information, while the latter seek to determine the economic and other impacts of a weather-related event on a particular segment of the economy or society as provided for the first time in Switzerland (Gunasekera, 2004) in the present study.

As a pilot study for Switzerland has shown (Frei, 2010) the most weather-sensitive sectors of the economy in Switzerland are agriculture, construction, energy, insurance, telecommunication, tourism, transport (aviation, road, railway) as well as logistics and water availability. The pilot study has further shown that it is hardly possible to estimate one single figure representing the total benefit from weather services in Switzerland. However, it was possible to work out specific answers concerning particular aspects of the benefits from weather and climate information. It was shown that in Switzerland the costs of operating MeteoSwiss amount very roughly to about one fifth of the respective revenues in Switzerland.

By also interviewing users of meteorological information in the road traffic sector, the present study is able to show for the first time that such information generates an economic benefit of 65.7–79.77 million Swiss francs. Since this is approximately the amount of the total budget of MeteoSwiss and it is generated only by one economic sector, so the overall benefit achieved by MeteoSwiss must be several times that amount. Compared with the findings in the previous pilot study of a cost/benefit ratio of 1:5 (Frei, 2010) and with other findings of national meteorological services (Anaman and Lellyett, 1996; Lazo and Chestnut, 2002; Leviäkangas et al., 2008) the estimated cost/benefit ratio of MeteoSwiss might be around 1:10.

A design for future studies should deal with the benefits for private households (willingness to pay for analysis, Rollins and Shaykewich, 2003) and specific economic sectors, particularly with regard to climate services. Analysis of benefits from climate services are of interest to MeteoSwiss since this federal government office is the main source for climate data in Switzerland.

REFERENCES

  1. Top of page
  2. Abstract
  3. 1. Introduction
  4. 2. Material and methods
  5. 3. Results
  6. 4. Conclusions and outlook
  7. REFERENCES
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