Economic and social impact assessment is the process of identifying, calculating and comparing the costs and benefits of a proposal in order to evaluate its merit, either absolutely or in comparison with alternatives. The proposal could be a project, a program or a policy change.
A range of different approaches and tools can be used to undertake economic and social impact assessment. The selection of approach and tool will be influenced by the nature of the investment or decision, the relevant inputs (including available data) and the answers being sought.
Economic assessments should not be relied on exclusively as they are seldom able to tell the ‘full story’. Other qualitative factors such as social, environmental (where not quantified and monetised in the economic assessment), equity and distributional impacts are also important and must be taken into account in the decision-making process. There may also be other strategic factors to consider that are difficult to assess through an economic assessment lens.
There are a range of different methods and tools for undertaking economic assessment. Of the methods that assess the overall merits of a proposal or compare a set of options based on net benefit to society, the most commonly used are: cost-benefit analysis, cost-effectiveness analysis, and break-even analysis. These approaches are based on a monetary valuation of options and their impacts.
Multi-criteria analysis can be used when it is not feasible to quantify or monetise the main impacts of an option. MCA can include a wide range of criteria (for example, social and environmental considerations), all measured in the most relevant unit as opposed to monetary values. This may mean that more criteria can be incorporated than would be the case with a quantitative analysis.
Team experience includes:
Australian Institute of Landscape Architects – quantified the contribution of the landscape architect industry to the Australian economy
Shell Australia – geospacial economic analysis of the contribution to Australia from Shell’s oil and gas sector operations in relation to six key projects across Australia including detailed case studies of three regional areas
University of Melbourne – an economic analysis of the costs and benefits of the completion of the Indigenous eye health strategy across Australia
Hawthorn Football Club – estimated the economic impact of the Tasmanian Government sponsorship of the Hawthorn Football Club to play a range of games in Launceston