Identifying Winners and Losers in Transportation

The issues surrounding transportation equity, both external and internal to transportation, are explored. Several examples are provided of transportation improvements that impose transportation costs on more individuals than those who are benefited. Beyond counting the number of winners and losers, several quantitative measures of equity are suggested and applied to a test case: ramp meters in the Twin Cities, Minneapolis–St. Paul, in Minnesota. It is recommended that transportation benefit-cost analyses include an " equity impact statement , " which would consider the distribution of opportunities to participate in decisions and the outcomes of those decisions (in terms of Social welfare includes both efficiency and equity. Transportation engineers are taught to provide for the safe and efficient movement of people and goods. They are not taught to ensure that transportation systems are equitable, in part because of the ambiguity associated with equity. Transportation textbooks seldom broach the subject, which is considered political rather than technical. [Hanson's text (1) is a notable exception.] In economics, the words " equity " and " fairness " do not appear in the index of Varian's standard textbook, Micro-economic Analysis (2). Still, economics does not completely ignore the topic; Baumol devoted a book to Superfairness (3). Public-sector investment decisions are made in nonmarket forums that often suffer from a short-term viewpoint and the dominance of selected individuals (4). For objectivity, public-sector investments generally rely on benefit-cost (B/C) analysis to compare various proposals. The use of B/C analysis as a decision-making tool in public choices results in the separate consideration of equity and efficiency. Usually the efficiency criterion employed by decision makers for a project overrides concern for equity. A situation is considered pareto efficient (or pareto optimal) if there is no way to make all agents better off, that is, if one cannot improve person Y without worsening person Z. However, there are two problems with pareto efficiency. First, some things, such as time, are not fungible, making exchange difficult (someone cannot give you 10 minutes). Second, the exchange does not actually occur. Therefore, although the pareto criterion is important from an efficiency point of view, it is unhelpful in trying to understand equity. Although transportation projects are formally planned on the basis of efficiency, equity criteria may affect the project. However, the concept of equity is highly subjective and changes with the individual concerned. A project that may appear equitable to the decision maker may …