The technology for the use of residue from municipal incinerators in highway construction has been developed over a number of years in conjunction with studies performed for the Federal Highway Administration's Materials Division. This study focuses on an evaluation of the economic factors influencing the use of incinerator residue in bituminous highway construction. Five Standard Metropolitan Statistical Areas (SMSA) (Chicago, Ill.; Harrisburg, Pa.; Miami, Fla.; New York, N.Y., and Washington, D.C.) were chosen to evaluate the economic factors that weigh on the greater use of residue in highway construction. The residue was evaluated for use as subbase material and in bituminous base. A cost analysis model was developed to determine economic feasibility that has broad application for other substitute aggregate economic analysis. The results of this study show that incinerator residue would prove competitive with virgin aggregate in highway construction in three of the five metropolitan areas studied. Projections can therefore be made that it is likely that incinerator residue would be economically feasible in other urbanized SMSAs having municipal incinerators.