Highway Development Decision-Making Under Uncertainty: Analysis, Critique and Advancement

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dc.contributor.authorEl-Khatib, Mayar
dc.date.accessioned2011-01-20T15:36:22Z
dc.date.available2011-01-20T15:36:22Z
dc.date.issued2011-01-20T15:36:22Z
dc.date.submitted2010
dc.description.abstractWhile decision-making under uncertainty is a major universal problem, its implications in the field of transportation systems are especially enormous; where the benefits of right decisions are tremendous, the consequences of wrong ones are potentially disastrous. In the realm of highway systems, decisions related to the highway configuration (number of lanes, right of way, etc.) need to incorporate both the traffic demand and land price uncertainties. In the literature, these uncertainties have generally been modeled using the Geometric Brownian Motion (GBM) process, which has been used extensively in modeling many other real life phenomena. But few scholars, including those who used the GBM in highway configuration decisions, have offered any rigorous justification for the use of this model. This thesis attempts to offer a detailed analysis of various aspects of transportation systems in relation to decision-making. It reveals some general insights as well as a new concept that extends the notion of opportunity cost to situations where wrong decisions could be made. Claiming deficiency of the GBM model, it also introduces a new formulation that utilizes a large and flexible parametric family of jump models (i.e., Lévy processes). To validate this claim, data related to traffic demand and land prices were collected and analyzed to reveal that their distributions, heavy-tailed and asymmetric, do not match well with the GBM model. As a remedy, this research used the Merton, Kou, and negative inverse Gaussian Lévy processes as possible alternatives. Though the results show indifference in relation to final decisions among the models, mathematically, they improve the precision of uncertainty models and the decision-making process. This furthers the quest for optimality in highway projects and beyond.en
dc.identifier.urihttp://hdl.handle.net/10012/5741
dc.language.isoenen
dc.pendingfalseen
dc.publisherUniversity of Waterlooen
dc.subjecthighway developmenten
dc.subjectdecision making under uncertaintyen
dc.subjectreal optionsen
dc.subjectjump processesen
dc.subjectinfinitely divisible distributionsen
dc.subjectLévy processesen
dc.subjectmeasure theoryen
dc.subjectcharacteristic functionen
dc.subjectcharacteristic exponenten
dc.subjectLévy jump measureen
dc.subjectprobability measureen
dc.subjectcádlág stochastic processen
dc.subjectWiener processen
dc.subjectPoisson processen
dc.subjectcompound Poisson processen
dc.subjectfinite activity modelsen
dc.subjectjump diffusion modelsen
dc.subjectMerton modelen
dc.subjectGaussian jump processen
dc.subjectKou modelen
dc.subjectdouble exponential jump processen
dc.subjectleptokurticen
dc.subjectvolatility smileen
dc.subjectinfinite activity modelsen
dc.subjectpure jumps processen
dc.subjectgeneralized hyperbolic modelen
dc.subjectmodified Bessel functionen
dc.subjectnegative inverse Gaussian modelen
dc.subjectgeometric Brownian motion modelen
dc.subjectlog-normal distribution modelen
dc.subjectnormality assumptionen
dc.subjectheavy-tailed distributionen
dc.subjectasymmetric distributionen
dc.subjectquantile-quantile ploten
dc.subjectRydberg algorithmen
dc.subjectparameter calibrationen
dc.subjectmomentsen
dc.subjectcummulantsen
dc.subjectsum of squaresen
dc.subjectMonte Carlo simulationen
dc.subjectleast-squares regressionen
dc.subjectbackward dynamic programmingen
dc.subjectdiscrete-time Markov chainen
dc.subjectland priceen
dc.subjecttraffic demanden
dc.subjecthighway service quality indexen
dc.subjectdata collectionen
dc.subjecttraffic volumeen
dc.subjectAnnual Average Daily Trafficen
dc.subjectOntario Ministry of Transportationen
dc.subjectLand Registry Officeen
dc.subjectProvince of Ontario Land Registration and Information Systemen
dc.subjectFreedom of Information Acten
dc.subjectseasonalityen
dc.subjectvalue of transportationen
dc.subjecttypes of transportation systemsen
dc.subjectimportance of highway systemsen
dc.subjecttransportation system development constraintsen
dc.subjectcost of wrong decisionsen
dc.subjectmonetary costen
dc.subjectprivate sector costen
dc.subjecthuman costen
dc.subjectland expropriationen
dc.subjectenvironmental costen
dc.subjectirreversibility cost factoren
dc.subjecttime cost factoren
dc.subjectpolitical cost factoren
dc.subjectopportunity costen
dc.subjectopportunity cost of wrong decisionsen
dc.subjecteconomic cost of wrong decisionsen
dc.subjecteconomic cost of mis-estimationen
dc.subjecteconomic profit of wrong decisionsen
dc.subjectcost of inactionen
dc.subjectprice of making right decisionsen
dc.subjectscope of decisionsen
dc.subjectrehabilitation decisionen
dc.subjectland acquisition decisionen
dc.subjectexpansion decisionen
dc.subjectuncertainty modelingen
dc.subjectland acquisition costen
dc.subjectexpropriation costen
dc.subjectconstruction costen
dc.subjectmaterial costen
dc.subjectMontréal-Mirabel International Airporten
dc.subjectPickering Airporten
dc.subject407 Express Toll Routeen
dc.subjectHighway 407en
dc.subject.programStatisticsen
dc.titleHighway Development Decision-Making Under Uncertainty: Analysis, Critique and Advancementen
dc.typeMaster Thesisen
uws-etd.degreeMaster of Mathematicsen
uws-etd.degree.departmentStatistics and Actuarial Scienceen
uws.peerReviewStatusUnrevieweden
uws.scholarLevelGraduateen
uws.typeOfResourceTexten

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Statistics and Actuarial Science