3. Proposed productivity metrics
After considering a number of measures, the most useful productivity metrics were considered to be (see further discussion in Appendix A):
- The present value of productivity benefits
- The productivity benefit intensity, which is present value of productivity benefits as a percentage of the present value of total benefits including WEBs
- The productivity benefit cost ratio (BCR), which is the present value productivity benefits divided by the present value of investment costs.
Table 2 shows a simple worked example of how to obtain the three productivity metrics from the main benefits and costs of a typical road transport initiative.
| Benefits and costs | ||
| a | Private car travel time vehicle operating cost savings | 12* |
| b | Business car and truck travel time vehicle operating cost savings | 5 |
| c | Safety benefits | 2 |
| d | Environmental benefits | 1 |
| e | Wider economic benefits | 4 |
| f | Investment cost | 12 |
| CBA measures without WEBs | ||
| g | Total benefits (a + b + c + d) | 20 |
| NPV (g - f) | 8 | |
| BCR (g / f) | 1.7 | |
| CBA measures with WEBs | ||
| h | Total benefits (g + e) | 24 |
| NPV (h - f) | 12 | |
| BCR (h / f) | 2.0 | |
| Productivity metrics | ||
| i | Present value of productivity benefits (b + e) | 9 |
| Productivity benefit intensity % (i / h *100) | 38% | |
| Productivity BCR (i / f) | 0.8 | |
* All values are $’000 million present values
The fact that the inputs for productivity metrics calculation can readily be extracted from CBAs makes the task of compiling these metrics straightforward once a CBA is done.