Michigan Economic Impact Model for Intelligent Transportation Systems

Intelligent Transportation Systems (ITS) are important for the future of the transportation systems industry. Although widely regarded as a new and powerful contribution to transportation systems, ITS however, may have a substantial effect on other industries as well. The aim of this study is to understand the impact that ITS may have on the Michigan economy. The methodical approach used to evaluate this impact is called Leontif’s Input-Output model. The Input-Output model considers all industries as intertwined and models the impact that ITS can make on these industries. The savings in reduced time delays and fuel costs are quantified. This overall cost reduction factor is used to compute multipliers for each industry. Multipliers are then calculated using a RIMS II model that aggregates all industries using 2-digit NAICS codes. In addition, another model incorporating specific industries using 6-digit NAICS codes is also suggested using IMPLAN. Work done in partial fulfillment of the requirements of Michigan State University MTH 844, advised by Thomas E. Borton, PhD, President of ITS Michigan, and Dr. Erik Bird, Department of Mathematics, Michigan State University.