CHAPTER 3

Socio-economic Impact (SEI) -

Economic
©By Dr.Devika Krishnan

CHAPTER 3 SOCIO-ECONOMIC IMPACT (SEI)- ECONOMIC, EVA516 1

 LEARNING OUTCOME

 At the end of this chapter, students should be able to

 Explain about SEI concept and definitions

 Discuss baseline studies in direct and indirect impact
 Explain principles of strategic assessment
 Review of SEI sample reports

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 Concept of SEI
1) Socio-economic impact cover a wide range of social and
economic impacts and the boundaries are fuzzy between both
social and economics impacts, and indeed between socio-
economic and other impact areas.
2) Economic impacts may range from macro-impacts of a new
projects on a nation’s Gross National Products to micro-
impacts of a new for electricians in a town adjacent to the
project.
3) Social impacts may include on local demographics,
livelihoods, cultural/heritage issues and upon physical and
mental health.
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 The strategic nature of decisions: intentions, guidance, orientations,
regulations; strategies are reviewed or replaced, but they are not built
(constructed) or demolished.

 The continuity of the decision-making process as opposed to discrete

decision-making. SEA deals with the process of developing policies, plans,
and programs, which is continuous in nature, and not only with the policy,
plan, or program instrument per se. A policy, plan, or program may be
created, reviewed, or replaced, which is part of the continuous nature of
the decision-making process at this strategic level.

 The optional value, referring to the range of multiple issue alternatives

involved in a strategic process.
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 Definitions
1) Wolf (1974), one of the pioneers of SIA, adopted the wide ranging definition of SIA as
‘the estimating and appraising of the conditions of a society organized and changed by
the large-scale application of high technology’.

2) Social Impact Assessment: Guidance for assessing and managing the social impacts of
projects (IAIA 2015), defined social impact assessment as ‘the process of analyzing,
monitoring and managing the intended and unintended social consequences, both
positive and negative, of planned interventions (policies, programs, plans, projects) and
any social change processes invoked by those interventions. Its primary purpose in to
bring about a more sustainable and equitable biophysical and human environment.’
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 Scoping and baseline studies

The IAIA guidance (2015) considers that:

“social impacts include all the issues associated with a planned intervention (project)
that affect or concern people, whether directly or indirectly. Specifically, a social
impact is considered to be something that is experienced or felt in either a perceptual
(cognitive) or corporeal (bodily, physical) sense, at any level, for example at th level
of an individual person, an economic unit (family/household), a social group
(circle/friends), a workplace (a company or government agency), or by
community/society generally. These different levels are affected in different ways by
an impact causing action”
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 Criteria-Scope of socio-economic impacts

1) What to include
2) What period of time
3) What area to cover
4) Who will be affected

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 What to include- types of socio-economic
impacts
1) Direct economic:
 Local/non-local employment
 Characteristics of employment (skill group)
 Labour supply and training
 Wage levels.

2) Indirect/wider economic/expenditure:
 Employees’ retail expenditure
 Linked supply chain to main development
 Labour market pressures
 Wider multiplier effects
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 Effects on development potential of area
3) Demographic:
 Changes in population size, temporary and permanent
 Changes in other population characteristics (family size, income levels, socio-economic
groups)
 Settlement patterns

4) Housing:
 Various housing tenure types
 Public and private
 House price/rent

5) Other local services:

 Public and private sector
 Educational services
 Health services/social support
 Others (police, fire, transport)
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6) Socio-cultural:
 Lifestyles/quality of life
 Gender issues
 Social problems (crime/ill-health)
 Community stress and conflict
 Community character or image

7) Distributional effects:
 Effects on specific groups in society (virtue of gender, age, religion, language,
ethnicity and location).

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 What period of time
 The question of what period of time to consider in a socio-economic assessment
raises, in particular, the often substantial differences between impacts in the
construction and operational stages of a projects.

 Major utilities such as power station and reservoir, roads may have high levels of
construction employment but much lower levels of operational employment.

 In contrast, manufacturing and service industry projects often have shorter

construction periods with lower levels of employment, but considerable
operational employment level over periods which may extend for several decades.

 The closure of a project may also have significant socio-economic impacts;

unfortunately these rarely covered in the initial assessment.
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 What area to cover
 What area to cover in SIA raises the often contentious issue of where to draw the
boundaries around impacts.

 Boundaries may be determined by several factors.

 For construction stage of a major project, a subregional or regional boundary may be

taken, reflecting the fact that construction workers are willing to travel long distance
daily for short-term, well paid employment.

 Other geographical area including availability of data and policy issues.

 A focus of local area impacts may provide a very partial picture, economic impacts
often have wide regional and occasionally national and international implications.
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 Who will be affected
 The distributional effects of development impacts do not fall evenly
on communities, there are usually winners and losers.

 For example, a new tourism development in a historic city may

benefit visitors to the city and tourism entrepreneurs but may
generate considerable pressures on a variety of services used by the
local population.

 Distributional effects can be analysed by reference to geographical

areas, age groups, socio-economic groups, employment groups.

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 Principles of strategic environmental
assessment
 Establish clear goals.
 Be integrated with existing policy and planning structures.
 Be flexible, iterative and customised to context.
 Analyse the potential effects and risks of the proposed PPP, and its
alternatives, against a framework of sustainability objectives, principles
and criteria.
 Provide explicit justification for the selection of preferred options and for
the acceptance of significant trade-offs.
 Identify environmental and other opportunities and constraints.
 Address the linkages and trade-offs between environmental, social and
economic considerations.
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 Review of SEI sample reports

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 THANK YOU

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