HDR Experts Explain a New Economic Method to Measure Equity and the Social Value of Infrastructure
From government agencies to many state and local entities, efforts to incorporate equity and environmental justice goals through new policies and initiatives have uncovered a gap in how we measure the economic value of infrastructure solutions. While a standard benefit-cost analysis provides evidence of proposed value, it does not account for the distributional effects of benefits and costs across a community.
HDR Principal Economist Chris Behr developed a new analytical method — Social Equity Value Analysis — that applies a weighted BCA framework with data on the income levels of beneficiaries. SEVA can be used to reveal a broader measure of social value of projects because it accounts for the differences in value to people according to their incomes. Specifically, this method accounts for the higher value that people with lower income place on project benefits, such as cost savings or risk reduction.
SEVA is the result of a year-long research project funded through HDR’s Fellowship research program. HDR has now incorporated weighted BCA results into grant and funding applications by following guidelines recently established by U.S. federal agencies. The method is applicable to a wide range of infrastructure projects including transportation, water, municipal and more.
“The SEVA process provides a more complete measure of a project’s social value and can, in turn, provide a better justification for infrastructure investment, especially those projects intended to support low-income beneficiaries,” Behr said. “We are supporting our clients and their communities to understand this new measure of social value so that they can make decisions in the best interests for all.”
In the latest from HDR’s Experts Talk interview series, Behr teams up with Transportation Equity Director Cathy LaFata to explain how he formulated the SEVA approach and its implications for the infrastructure industry.
“As U.S. infrastructure owners strive to achieve community goals and the objectives of the Justice40 initiative where 40% of the overall benefits of climate, clean energy, affordable and sustainable housing investments flow to disadvantaged communities, there is a need to be able to quantify these benefits and SEVA can provide that data,” LaFata said.
About HDR
HDR is a 100% employee-owned professional services firm. Founded over a century ago to bring electricity to a changing world, we are now a global company specializing in architecture, engineering, environmental and construction services. Our success in built and natural environments continues as we collaborate to solve our clients’ and communities’ most complex challenges.
