Representative Alignment, which this estimate refers to (Sound Transit)

Graham Johnson’s KIRO report on ST3 cost escalation was notable for its literate discussion of inflation adjustment:

Sound Transit says the estimate in ST3 was $5.8 billion in 2014 dollars, which the agency considers equivalent to $6.8 billion in 2018 dollars. The newest estimate is $7.5 billion in 2018 dollars.

First of all, good for both ST and Johnson that they took the care to compute and report this. Although the real increases here are indeed a story, revising an estimate from 2014 to 2018 dollars is no news at all. That context is usually sorely lacking in stories about increasing costs.

Our comment thread had a spirited discussion as to what inflation measure the estimate used. ST’s Scott Thompson verified for STB that they used “Construction Cost Index for construction estimates, Right of Way index for real estate, and the Consumer Price Index for soft costs.” This seems reasonable enough. But there are at least three different ways one can deflate rising costs, and they serve different purposes.