A Fair Division Approach to Performance-based Cross-Asset Resource Allocation
Porras-Alvarado, Juan D.
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Resource allocation mechanisms have become a major issue for transportation agencies in the United States and around the world. In order to meet budgetary restrictions resulting from reductions in funding, transportation agencies have explored alternatives to modify the traditional approaches to funding allocation. Most of the alternative methods for funding allocations focus on maximizing infrastructure performance, obviating the consideration of equity. Equity considerations often influence allocation decisions; therefore, the impact of equity should be considered in funding allocation analyses. This paper presents a methodological framework for performance-based cross-asset resource allocation using the fair division method. The fair division method allocates resources in such a way that participants believe they are receiving a fair share based on utility functions. Collective utility functions are used to conduct tradeoff analyses of different allocations in terms of total utility and total envy which are compared to the predicted asset performance. A case study using performance data maintained by the Texas Department of Transportation was conducted to demonstrate the applicability of the proposed framework. Results from the study suggested that the proposed framework for cross-program resource allocation could be an effective and reliable tool for transportation agencies to allocate resources in an objective manner. Additionally, this framework provides the necessary means to incorporate equity factors in the allocation processes, addressing a major shortcoming associated with most traditional approaches to resource allocation.