A quantitative transportation project investment evaluation approach with both equity and efficiency aspects

Abstract

The motivation of this study is to develop a method for evaluating transportation investment quantitatively with consideration of both efficiency and equity.The current evaluation methods, predominantly cost–benefit analysis (CBA), concentrate mainly on the economic efficiency. Lacking equity considerations, these evaluation methods may result in an inappropriate investment. China is now a typical country with such a problem. With the huge investment in transportation infrastructure flooded in eastern provinces decades ago, these areas are benefitting the high GDP growth rate which is supported by these infrastructure, while the western provinces are suffering from the poor transportation system.Developing countries tend to invest more in comparatively developed areas for a higher return rate, leaving diversity between areas become more and more huge.This study introduced equity impacts into transportation investment evaluation methods after the concepts of various types of equity have been reviewed. Four quantitative models are proposed corresponding to 4 types of equity. Hereafter, an evaluation model from both equity and efficiency aspects for highway infrastructure investment appraisement is developed based on the theory of Wilson's entropy. The Lagrangian method is used to testify the model and to prove the result possesses optimal benefit distribution. This model takes account of the differences among different areas and social groups. Sensitivity analysis is conducted before twelve highway investment projects in China are studied with the method. The evaluation result is observably different from the one derived from the CBA.This fundamental consideration of transportation equity as well as the quantitative models may be helpful to developing countries or areas. However, further studies on transportation equity still need and the model still needs to be improved.