Overview
This paper reviews how state departments of transportation calculate and use highway construction cost indexes (HCCIs), drawing on a literature review and a nationwide survey. It describes two ways to select items for the market basket: grouping items into categories or tracking them individually.
The Fisher index is the most commonly used formula among surveyed state DOTs and is recommended by the Federal Highway Administration and International Monetary Fund. Despite their potential, HCCIs remain in limited use at many state agencies.