Dependent Variable This is typically the cost of the output, in monetary terms and in a given time period. To adjust for the effects of inflation it is often necessary to express the cost item in constant dollar. For facility construction and improvement project, construction price indices are used to convert current dollars to constant dollars, as discussed in Section 4.6.2. Generally, the dependent variable can be a total cost or a unit cost (total cost per unit output). In using the unit cost as the dependent variable, the analyst typically calculates unit costs for each observation (e.g., cost per lane-mile per passenger-mile), or per ton-mile and then develops statistical functions of such costs with respect to output, facility dimensions and/or other characteristics. This approach presupposes that costs are linearly related to the output variable, thus impairing investigation of scale economies. A superior and more flexible approach is to use the total cost as the dependent variable and to use the output variable with respect to each independent variable can be determined, and then the existence and extent of scale economies or diseconomies can be identified