US Army Corps of Engineers
Institute for Water Resources Website

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Value to the Nation

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Capital Stock Computations

Capital stock value represents the value a portfolio of infrastructure at any given point in time. The current Corps Capital Stock incudes all water resources infrastructure built by the Corps from 1928 to 2017. This infrastructure includes dams, levees, harbors and waterway improvements, locks, channels, hydroelectric generating works, and recreation facilities.

Within Fast Facts, the Corps capital stock value is determined using the Perpetual Inventory Method (PIM). The PIM method is a top-down approach that estimates the value of capital stock by calculating the cumulative value of investments over time while adjusting for asset retirements and losses in productive capacity caused by deterioration (i.e., normal wear and tear). Deterioration over time is modeled by a specified decay function.  The shape of this decay function (e.g., linear vs. hyperbolic) should reflect the simulated pattern of deterioration over time of the asset or group of assets being modeled. While a bottom-up method (i.e., calculating capital stock value at the asset/project level) would provide more accurate results, historical data of such a high resolution are not easily attainable.  And physically surveying the USACE capital stock at the asset level would be cost prohibitive. The basic PIM equation is as follows:

Graphic of Decay Functions

Graphic of Capital Stock Calculations

A detailed discussion and additional background on PIM is contained in Measuring Capital: OECD Manual Second Edition, 2009.

The analysis presented in Fast Facts assumes a hyperbolic deterioration function for all mission areas except for dredging, which uses a straight line deterioration function. The assumed service lives for each mission area are 15 years for Navigation dredging; 60 years for the Flood Risk Management, Multipurpose, and MR&T functional categories; and 75 years for the Navigation functional category.

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2017 Capital Stock Fast Facts