HDR Establishes Economic Methods to Assess Social Equity Value in Infrastructure

HDR Principal Economist Chris Behr completed a multiyear research initiative to determine how economic analysis can contribute to equity assessments of infrastructure projects.

Funded through HDR’s Fellowship Program, the work culminated in an economic method, called Social Equity Value Analysis, which better accounts for the value of projects to disadvantaged communities and people with lower incomes. The SEVA method was reviewed and endorsed by an advisory panel of leading subject matter experts including academics and federal, state and local agency economists and engineers.

“SEVA reveals a more complete measure of the value of projects in ways that a benefit-cost analysis cannot, especially for people with lower incomes,” Behr said. “The results add important new perspectives on projects for infrastructure owners and state and federal funding agencies, which aim to account for equity in implementation decisions.”

SEVA is a benefit-cost analysis weighted by the income differences of beneficiaries, a key feature of most measures of equity and distributive justice. The results of a SEVA can be presented in the same way as a BCA — with a comparison of benefits and costs. HDR is standardizing this approach in all of its economic analyses.

The SEVA approach is grounded in economic theory and consistent with U.S. federal BCA guidelines related to assessing the distribution of outcomes. The Office of Management and Budget recently issued draft revisions to its BCA guidelines and includes a discussion on implementing a distributional analysis in the same form as SEVA.

“Equity has become a cornerstone of planning and implementing new infrastructure projects, and today, federal funding depends on demonstrating equity considerations,” said Cathy LaFata, HDR’s transportation equity director. “SEVA can give owners greater insights on the equity implications underlying implementation decisions across a portfolio of project alternatives. For owners seeking to elevate equity in their planning criteria, SEVA is a defensible method that can provide a compelling rationale for funding a project that makes sense to implement.”

About HDR
For over a century, HDR has partnered with clients to shape communities and push the boundaries of what’s possible. Our expertise spans more than 12,000 employees in more than 200 locations around the world — and counting. Our engineering, architecture, environmental and construction services bring an impressive breadth of knowledge to every project. Our optimistic approach to finding innovative solutions defined our past and drives our future.