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The objective of this study was to reveal the trend in highway construction costs following Hurricanes Katrina and Rita in Louisiana. The means of measuring highway construction cost was the Louisiana Highway Construction Index, an index made up of the cost of labor, equipment, and six major materials used in highway construction. Data from projects let by the Louisiana Department of Transportation and Development from the second quarter of 2003 to the second quarter of 2007 were used to track the change in construction costs. Index values from hurricane-impacted areas (GO Zones) were compared with those in Non-GO Zones. The indices revealed that two quarters after Hurricanes Katrina and Rita, the highway construction cost jumped about 20% statewide and 51% in GO Zone. Two years after the hurricanes, the cost has stabilized to around 30% increase over the pre-Katrina and Rita period. This study provides valuable information for the state agency to estimate cost escalation in ongoing projects and to estimate future disaster response to highway construction costs. [ABSTRACT FROM AUTHOR]

The objective of this research was to develop a procedure that estimates the escalation of highway construction costs over time. An artificial neural network model was developed which relates overall highway construction costs, described in terms of a highway construction cost index, to the cost of construction material, labor, and equipment, the characteristics of the contract and the contracting environment prevailing at the time the contract was let. Results demonstrate that the model is able to replicate past highway construction cost trends in Louisiana with reasonable accuracy. Future construction input costs are estimated from commercially available forecasts of indicator variables closely associated with the price of construction labor, construction equipment, and a representative set of highway construction materials. Future contract characteristics and the contracting environment that is likely to exist in the future are estimated from past trends or stipulated to be consistent with policy decisions in the future. The predictions produced by the model estimate that highway construction costs in Louisiana will double between 1998 and 2015. [ABSTRACT FROM AUTHOR]