2. What are productivity metrics?

Productivity metrics are quantitative measures that indicate the extent to which an initiative contributes to national productivity and the proportion of an initiative’s benefits that are productivity related.

In exploring productivity metrics, the broad range of benefits arising from transport initiatives have been grouped into the following three categories:

  1. Benefits that have a clear and significant productivity impact (by reducing the costs of production or improving the productivity of inputs) and that can be readily estimated using accepted appraisal methodologies
  2. Benefits that also that have a productivity impact but are difficult to measure and assess and are less significant, and
  3. Benefits that do not have an impact of any significance on productivity.

In the productivity metrics proposed here, only category 1 benefits are included. Categories 2 and 3 are excluded.

Table 1 groups benefits typically included in conventional transport CBAs against these three categories, and forms the proposed guide for practice.

Table 1: Benefits to include and exclude from productivity metrics
Benefits that can be included in productivity metrics

For business travellers(1) and freight:

  • Travel time savings
  • Vehicle operating cost savings
  • Reliability improvements (if available)
  • Wider economic benefits (WEBs) (if they exist for initiative and are available) – agglomeration benefits being the main one (see T3)
Benefits that should not currently be included in productivity metrics(2)

The productivity elements of:

  • Safety benefits (valued using the human capital approach)
  • Environmental health benefits
  • Health benefits from active travel
Benefits that should not be included in productivity metrics

Non-business (i.e. private) travel benefits, including for journey to work

  • Travel time savings
  • Vehicle operating cost savings
  • Reliability improvements (if available)

Notes to Table 2.1:

(1) Most would be by car, but there would be some business travel by public transport and active travel modes. Business-to-business walking trips within a locality could be an important source of knowledge transfer benefits, a component of agglomeration economies.

(2) Further work on these issues may enable future updates of the Guidelines to revisit these exclusions.