5. Process for undertaking equity assessment

While there is no harmonised methodology for undertaking equity assessments in Australia or overseas, there are guiding principles, tools and techniques to consider when undertaking equity investigations. A five stage process (see Figure 1) for considering equity in transport proposals is presented here.

Figure 1: Process for considering equity analysis

5.1 Scoping

The first step of equity assessment is concerned with identifying groups and individuals that have an interest in the initiative. The people affected will be influenced by things such as the characteristics of an initiative, its location and scale. This step seeks to identify ‘communities of interest’. The term ‘community’ is widely used in the literature to describe various stakeholders. Here, the term ‘community’ is used to represent the diverse points of view (communities of interest) that are likely to contrast and conflict to some degree and change over time.

Identification of communities of interest can be undertaken as part of a Social Impact Assessment or as an independent exercise. SIA is an integral part of the project assessment process for certain categories of initiatives (e.g. large infrastructure investments with noticeable community impacts). SIA and its derivatives are described in Appendix B.

Once the practitioner has characterised the communities of interest relevant to an initiative, they will need to find the most appropriate participation processes to engage these stakeholders. Further information on community participation processes is provided in Appendix C.

Part of the initial scoping step is to provide a detailed understanding of the nature of the initiative itself. This would entail information about the type of initiative (e.g. freight, passenger movement, public transport, multi-modal and network aspects), function performed, level of demand changes and geographical extent of the initiative and potential influences.

5.2 Profiling

This step is concerned with developing a profile of the groups and individuals that are identified at the scoping stage. This can be done by developing community social profiles that provide detailed information about the characteristics of community groups and individuals impacted by transport initiatives (see Table 2 below).

Distribution effects may impact socio-economic or geographical groups within the community to varying degrees. To identify which sections of the community are exposed to beneficial outcomes and which are exposed to adverse effects, a broad range of characteristics needs to be considered. Income, ethnicity and race have been the most common socio-economic characteristics used in studies of social equity. The major reason for this is that such data are collected regularly and systematically, and are readily available through the Australian Bureau of Statistics which undertakes a five yearly census of the population. Most studies compare population attributes in political jurisdictions (states, cities, etc) or data constructs (post codes, census areas). Availability of data at different spatial levels is the determining factor. This data can then be analysed by itself or used to construct an equity index.

Information about community attributes (characteristics) are often collected using stated preference surveys (described in Commentary B). These are mostly used in the absence of (or as a means of supplementing) available data to inform equity evaluations.

5.3 Impact characterisation

Transport initiatives may result in any number of demographic, economic, geographical, political and environmental impacts.

Impact characterisation may include identifying impacts under different sets of assumptions or development options or scenarios. The nature of the impacts, including descriptions of magnitude, direction, location and range of influence, will need to be considered.

Matched comparison and reflexive comparison evaluation methodologies are two common methods of investigation (see Table 1 below).

Table 1: Matched comparison and reflexive comparison studies
Matched comparison With and without initiative	Reflexive comparison Before and after initiative
An ex-post, retrospective approach that compares one area (with the intervention) to another (without the intervention)	An ex-post, retrospective approach that utilises a before and after initiative methodology for comparison
These approaches are not necessarily mutually exclusive and a combination of each is likely to be an element of best practice evaluation
Key considerations Need to consider local context and situational differences that may make matched comparison difficult Need to consider distributional effects that may vary across spatial boundaries Applicable to initiative level evaluation where shorter-term outcomes are desired Need to consider spatial scale of the initiative (local, regional, national), the time horizon (short, medium and long term) and the type of intervention (eg, initiative, program or policy level) Need to consider the desired objectives (such as a shorter-term initiative result and a longer-term capacity building outcome). This includes differences such as ‘end’ or ‘development process’ measures that reflect the purpose of the intervention. For example, an intervention with a capacity building objective may have a longer-term focus than a specific initiative level development Need to consider diversity in the criteria set (that goes beyond traditional normative economic measures such as NPV).

Table 2: Variables used to define a community social profile
Characteristic	Variable	Examples of measures of variables	Possible data sources
Socioeconomic status	Income	Median income of families and individuals% families below poverty level	Census or local government
	Education	Median years of education completed
	Employment	% in occupational categories% employment by type and location% unemploymentStatus of employment (temporary or long term)	Census or Centrelink
	Mobility characteristics	Car ownership and availabilityUse of alternative and non-motorised modes	Road agency registration data, travel diaries, surveys or focus groups
Demographic factors	Population	Total populationPopulation density	Census
	Ethnic composition	% of population from different ethnic groups
	Age composition	% in 10-year age categories
Housing factors	Homeowner/renter composition	% housing owner occupied% housing renter occupied	Census or local government
	Housing quality	% houses% units/apartments% public housing
	Housing value	Median house valueMedian rent
	Residential stability	% > 5 years in residence% > 10 years in residence
Family structure	Household size	% single person householdsMedian household size	Census or local government
Family structure	Household composition	% households with husband/wife% single parent households with children	Census or local government
Land use	Nature of land use	Total land area of community% residential% recreational% commercial% industrial% vacant and farm	Local and state government
Community institutions	Religious	Number, type and location of institutionsPatterns of use of institutions	Local and state government
	Government services including libraries, police stations, etc.
	Commercial
	Education, including child care
	Health facilities
	Recreation facilities
Accessibility characteristics	Transport connectivity to region	Type and frequency of services available.	Regional transport planners, travel surveys and focus group
Accessibility characteristics	Efficiency and ease of inter-modal connections	Number of inter-modal connections available	Regional transport planners, travel surveys and focus group
Quality of transit service	Level of service	Frequency and hours of serviceNumber of access locationsRates of usageFare structure	Service providers, local government, focus groups, travel surveys
Environmental and social stress factors	Existing noise levels	Proximity to major roadways	Local government or road authority
	Existing air pollution levels	Proximity to major roadways and polluting industries
	Safety	Vehicle and pedestrian accident rates
Community goals and public attitudes	Goals, aesthetics, health, safety, security, preservation of tax base, attitudes towards development and specific alignments necessary	Residents’ attitudes	Attitudinal surveys

5.4 Analysis

Assessing equity inevitably involves difficult subjective judgements. Appendix D provides an example (Khisty, 1996) of an analysis that attempts to navigate this subjectivity through use of distributional rules or theories of justice.

5.5 Response

The response step deals with considering alternative choices for mitigation. There are many potential responses to address equity concerns. Some responses will involve compensating adversely affected parties in some way. In some cases, the response may involve selecting an option with a lower BCR (and hence lower net benefits) but with a more acceptable equity outcome.

In general, the most appropriate trade-off option will be sought for the situation. For new transport infrastructure/services, trade‑offs between efficiency and equity can be made early in the project planning stage (for example, see Khisty, 1996 ). Common appraisal tools such as CBA or MCA can be applied at a disaggregate level (i.e. for different communities of interest) to identify equity impacts as they affect different groups within a population.

For a given initiative, trade-offs between efficiency and equity can be made using a variety of approaches. The determining factors are influenced by the policy options and tools available to the decision-maker. Appendix E provides a couple of examples, namely equity considerations in the management of road space through road user charges and non-price rationing.