This section of the ATAP Guidelines discusses assessment of the distributional or equity impacts of transport initiatives.
The assessment of distributional or equity effects is an important aspect of transport assessment and decision making. Distributional (equity) assessment involves identification of the ‘winners’ and ‘losers’ resulting from transport initiatives, the scale of those effects and the socio-economic characteristics of the impacted groups.
It contrasts with the efficiency focus of cost-benefit analysis, which measures an initiative’s combined net benefit (i.e. total benefits less total costs). Distributional effects should be reported separately from and alongside the cost-benefit analysis results.
An understanding of distributional effects is especially important in identifying the impacts of initiatives on disadvantaged members of the population. It also provides a valuable insight into the motivations and behaviours of various stakeholders in relation to their support for or opposition to a proposed initiative.
Appendix A provides some examples of how equity issues are treated in transport decision-making.
The Commonwealth Department of Finance and Administration (2006) notes the importance of distributional assessment. It advises that:
- Decision-makers need information about the distributional effects of initiatives where they are significant.
- Gains and losses by the relevant groups can be displayed in chart or tabular form as an adjunct to the CBA.
- As a general rule, the use of distributional weights in cost-benefit analysis is not advised, leaving distributional judgments to be made at the political level.
- Where an option is selected on equity grounds, the decision-maker should be advised of the efficiency cost (in terms of loss net benefits compared to the option with the greatest net benefits).