An Evaluation of the Performances of Equity Measures

The issue of equity in transport have received extensive attention, especially more recently related to congestion pricing. This body of research has different focus. Some address the distributions of economic gains and losses among different groups of users, usually by income, and suggests how to calculate these. Others have focused on alternative schemes for redistribution of the toll revenues in order to address equity concerns. And some have focused on the identification of different stakeholders such as consumers, producers and operators, and subgroups among stakeholders that are affected differently by a policy. See Eliasson and Lundberg (2002) for a survey. A few studies address the quantification of inequality formally. Among these the EU funded research projects AFFORD, MC-ICAM and PROSPECTS (see Fridstrøm, et al 2000; Minken et al, 2002; MC-ICAM, 2003). There are two alternative approaches available to respond to equity considerations. One approach is to directly respond to the distributional concerns by adopting an explicit form of social welfare function and the choice of a desired inequality aversion parameter. The second approach is to apply an inequality measures for the comparison of inequality of a given pair of distributions of a variable that changes as the result of a policy, such as income, accessibility, etc. The equity implications are evaluated by the latter approach in a partial equilibrium model of transport. The main purpose of this paper is to illustrate some of the challenges that arise in addressing efficiency and equity of a package of instruments with a partial equilibrium model of transport model. The paper provides an overview of some equity measures and their properties. The performances of these equity measures are evaluated in the case of a road-pricing scheme for Oslo. This paper shows that equity and accessibility measures can only provide information about the potential distribution of welfare among a population or over a geographical area. The sizes of the equity measures are quite sensitive to the level of spatial disaggregation and to the scale and translation in the measure of welfare. While it should in many cases be possible to pass judgment on which one of a set of alternatives is the most equitable, relating the equity objective to a predefined value of any of these measures is not a desirable approach. Furthermore it is difficult to make a judgement about the equity implication of a policy on the basis of a single measure and without a thorough examination of several measures.