The value of travel time savings in freight transport: a meta-analysis

Transportation - The value of freight travel time savings (VFTTS) is a monetary value that is considered an important input into cost–benefit analysis and traffic forecasting. The VFTTS is...     

The valuation of commuter travel time savings for car drivers: evaluating alternative model specifications

The empirical valuation of travel time savings is a derivative of the ratio of parameter estimates in a discrete choice model. The most common formulation (multinomial logit) imposes strong restrictions on the profile of the unobserved influences on choice as represented by the random component of a preference function. As we progress our ability to relax these restrictions we open up opportunities to benchmark the values derived from simple (albeit relatively restrictive) models. In this paper we contrast the values of travel time savings derived from multinomial logit and alternative specifications of mixed (or random parameter) logit models. The empirical setting is urban car commuting in six locations in New Zealand. The evidence suggests that less restrictive choice model specifications tend to produce higher estimates of values of time savings compared to the multinomial logit model; however the degree of under-estimation of multinomial logit remains quite variable, depending on the context.     

Passengers’ willingness to pay for airport ground access time savings

There are cases when passengers are willing to pay a premium to reduce the travel time, in particular when the trip has to be made. This paper aims to provide insight into factors that determine passengers’ willingness to pay to reduce travel time for their ground access to an airport. A methodology is developed that comprises two steps: the identification of the passengers with zero willingness to pay and from the rest the estimation of the additional price they are willing to pay to reduce their travel time. For the first step a Probit model was formulated and for the second a linear regression model. To this purpose, data has been collected employing stated preference from passengers at the Athens International Airport. It has been found that a high percentage of passengers have zero willingness to pay, and of the remaining ones those using public transport have a significant willingness to pay to reduce access travel time. The methodology and the models are structured in such a way that their transferability to any airport environment is possible, thus providing a useful tool for decisions relating to airport ground access measures.     

Willingness to pay for improving service quality in a multimodal area

Travellers use the installations at multimodal areas to transfer from one mode of transport to another. In many cases these installations are called interchanges. This article characterises the users of transport interchanges to determine the fundamental attributes which they most value when they pass through the area. A Stated Choice survey is designed and administered and Mixed Logit models are estimated to calculate willingness to pay levels for three main attributes: transfer time, the quality of the available information and the services provided in the area. Travellers place most value on the quality of the information they receive and the available services rather than on transfer time, which contradicts the widely held opinion of experts in the field. This opens up new possibilities in the design of modern interchanges which should concentrate more on being welcoming areas with many information points rather than being based around minimising transfer times.     

Embedding risk attitude and decision weights in non-linear logit to accommodate time variability in the value of expected travel time savings

In recent years we have seen important extensions of logit models in behavioural research such as incorporation of preference and scale heterogeneity, attribute processing heuristics, and estimation of willingness to pay (WTP) in WTP space. With rare exception, however, a non-linear treatment of the parameter set to allow for behavioural reality, such as embedded risk attitude and perceptual conditioning of occurrence probabilities attached to specific attributes, is absent. This is especially relevant to the recent focus in travel behaviour research on identifying the willingness to pay for reduced travel time variability, which is the source of estimates of the value of trip reliability that has been shown to take on an increasingly important role in project appraisal. This paper incorporates, in a generalised non-linear (in parameters) logit model, alternative functional forms for perceptual conditioning (known as probability weighting) and risk attitude in the utility function to account for travel time variability, and then derives an empirical estimate of the willingness to pay for trip time variability-embedded travel time savings as an alternative to separate estimates of time savings and trip time reliability. We illustrate the richness of the approach using a stated choice data set for commuter choice between unlabelled attribute packages. Statistically significant risk attitude parameters and parameters underlying decision weights are estimated for multinomial logit and mixed multinomial logit models, along with values of expected travel time savings.     

Assuring finite moments for willingness to pay in random coefficient models

Random coefficient models such as mixed logit are increasingly being used to allow for random heterogeneity in willingness to pay (WTP) measures. In the most commonly used specifications, the distribution of WTP for an attribute is derived from the distribution of the ratio of individual coefficients. Since the cost coefficient enters the denominator, its distribution plays a major role in the distribution of WTP. Depending on the choice of distribution for the cost coefficient, and its implied range, the distribution of WTP may or may not have finite moments. In this paper, we identify a criterion to determine whether, with a given distribution for the cost coefficient, the distribution of WTP has finite moments. Using this criterion, we show that some popular distributions used for the cost coefficient in random coefficient models, including normal, truncated normal, uniform and triangular, imply infinite moments for the distribution of WTP, even if truncated or bounded at zero. We also point out that relying on simulation approaches to obtain moments of WTP from the estimated distribution of the cost and attribute coefficients can mask the issue by giving finite moments when the true ones are infinite.     

The valuation and demand impacts of the worthwhile use of travel time with specific reference to the digital revolution and endogeneity

Transportation - The research reported here is concerned with how the worthwhile use of travel time might impact on the value of travel time savings (VTTS) and on demand set in the context of the...     

Willingness to accept commuting time within the household: stated preference evidence

In this study, stated preference data is used to derive estimated values of commuting time (VOCT). Both spouses in two-earner households are individually making trade-offs between commuting time and wage; both with regard to their own commuting time and wage only, as well as when both their own commuting time and wage and their spouse’s commuting time and wage are simultaneously changed. Thus, we are able to compare how male spouses and female spouses value each other’s commuting time. When only ones own commuting time and wage are attributes, the empirical results show that the estimated VOCT is plausible with a tendency towards high values compared to other studies, and that VOCT does not differ significantly between men and women. When decisions affecting commuting time and wage of both spouses are analyzed, both spouses value the commuting time of the wife highest. Further analysis show that this result is driven by households where the man has the highest income. If VOCT were to be gender specific in policy implications, the value might be higher for women than for men in two-earner households.     

Estimating travel time functions for urban roads: options and issues

Travel time functions specify the relationship between the travel time on a road and the volume of traffic on the road. Until recently, the parameters of travel time functions were rarely estimated in practice; however, a compelling case can be made for the empirical examination of these functions. This paper reviews, and qualitatively evaluates, a range of options for developing a set of travel time functions. A hierarchy of travel time functions is defined based on four levels of network detail: area, corridor, route and link. This hierarchy is illustrated by considering the development of travel time functions for Adelaide. Alternative sources of data for estimating travel time functions are identified.

In general, the costs and benefits increase as the travel time functions are estimated at finer levels of network detail. The costs of developing travel time functions include data acquisition costs and analysis costs. The benefits include the potential for reducing prediction errors, the degree of application flexibility and the policy sensitivity of the travel time functions.     

VTT or VTTS: a note on terminology for value of travel time work

Transportation - The value of travel time (VTT) can be said to be the most important number in transport economics, and its estimation has been the topic of extensive academic and applied work....     

Considerations about the quality assessment of travel time and travel distance distributions in transport modelling: a proposal for a standardized methodology

Transportation - In travel demand modelling, trip distance distributions or trip time distributions are used to evaluate how well a model fits with observed sample data. Therefore, the comparison...     

The digital revolution and worthwhile use of travel time: implications for appraisal and forecasting

Savings in travel time and more specifically their monetary value typically constitute the main benefit to justify major investment in transport schemes. However, worthwhile use of travel time is an increasingly prominent phenomenon of the digital age. Accordingly, questions are increasingly being asked regarding whether values of time used by countries around the world based on their appraisal approaches are too high. This paper offers the most comprehensive examination of our theoretical and empirical understandings of international appraisal approaches and how they account for worthwhile use of travel time. It combines the economics perspective with wider social science insight and reaches the conclusion that past revolutions in transport that have made longer and quicker journeys possible are now joined by a digital revolution that is reducing the disutility of travel time. This revolution offers potential economic benefit that comes at a fraction of the cost of major investments in transport that are predicated on saving travel time. The paper highlights the challenges faced in both current and indeed potential alternative future appraisal approaches. Such challenges are rooted in the difficulty of measuring time use and productivity with sufficient accuracy and over time to credibly account for how travel time factors into the economic outcomes from social and working practices in the knowledge economy. There is a need for further research to: establish how improvements in the opportunities for and the quality of worthwhile use of travel time impact on the valuation of travel time savings for non-business travel; improve our understanding of how productive use of time impacts on the valuation of time savings for business travellers; and estimate how these factors have impacted on the demand for different modes of travel.     

A stated preference examination of time of travel choice for a recreational trip: An addendum

A paper was published in the immediately previous issue of this journal describing a stated preference experiment examining how people are influenced in the selection of a departure time for a hypothetical trip to see a movie. The title was ‘A stated preference examination of time of travel choice for a recreational trip’, Volume 30(3):17–44. Numbers were used to indicate references in the text of the paper and in Table 1 accompanying the text, but these numbers were omitted from the list of references at the end of the paper - making it very difficult to identify specific citations. The list of references from the paper is reprinted below with the reference numbers included. This provides a listing that can be used in conjunction with the text of the paper and Table 1 as published to identify specific citations as intended.     

A joint time-assignment and expenditure-allocation model: value of leisure and value of time assigned to travel for specific population segments

Transportation - Based on a time-use model with a sound theoretical basis and carefully collected data for Austria, the value of leisure (VoL) for different population segments has been estimated....     

Willingness to board: A novel concept for modeling queuing up passengers

This paper addresses an innovative concept, termed as queuing passengers’ willingness to board (WTB) the transit vehicles. In the peak hours, some queuing passengers cannot board a crowded bus/train, but when the same vehicle arrives at the next stop, some other passengers could still get on. This phenomenon reflects that passengers at different queuing locations have heterogeneous level of ambitions to board. A methodological framework is proposed for the quantitative investigation of WTB. First, a general model is proposed, together with a new least square method (LSM) for the calibration. Then, a parametric model is developed, which is also calibrated by the LSM. To refine the calibration method and deal with the biasness of survey data, a weighted least square method is further developed. Based on real survey data, the calibration results clearly support the existence of WTB, which can be used to estimate the capacity of transit vehicles. This paper also sheds some lights on the practical applications of the quantitative WTB.     

Dense network traffic models,travel time reliability and traffic management. Ii: Application to network reliability

This paper is the second of a pair of papers discussing two main themes concerning dense network modelling. These themes are: (1) the changing nature of traffic management technology and the underlying objectives behind traffic management practice, and (2) the use of measures of network reliability in models, especially as an element of the evaluation of alternative network configurations. This paper develops and applies the second theme, the use of network reliability concepts in the evaluation of traffic networks, through consideration of variations in travel times, distinction between local street and arterial road networks, and the definition and application of a set of reliability indices that may be used to study different trip movements in a network. It indicates how these indices may be used in appraising different traffic management plans for a dense network of local streets and arterial roads, using a case study application.     

Multilevel analysis of daily time use and time allocation to activity types accounting for complex covariance structures using correlated random effects

In this paper multilevel analysis is used to study individual choices of time allocation to maintenance, subsistence, leisure, and travel time exploiting the nested data hierarchy of households, persons, and occasions of measurement. The multilevel models in this paper examine the joint and multivariate correlation structure of four dependent variables in a cross-sectional and longitudinal way. In this way, observed and unobserved heterogeneity are estimated using random effects at the household, person, and temporal levels. In addition, random coefficients associated with explanatory variables are also estimated and correlated with these random effects. Using the wide spectrum of options offered by multilevel models to account for individual and group heterogeneity, complex interdependencies among individuals within their households, within themselves over time, and within themselves but across different indicators of behavior, are analyzed. Findings in this analysis include large variance contribution by each level considered, clear evidence of non-linear dynamic behavior in time-allocation, different trajectories of change in time allocation for each of the four dependent variables used, and lack of symmetry in change over time characterized by different trajectories in the longitudinal evolution of each dependent variable. In addition, the multivariate correlation structure among the four dependent variables is different at each of the three levels of analysis.     

The evolution of U.S. rail freight pricing in the post-deregulation era: revenues versus marginal costs for five commodity types

There have now been over three decades of experience with rate-making freedom for all modes of intercity freight transport in the United States. Most evidence suggests that regulatory change has been beneficial for the rail industry and its users. Despite evidence of positive impacts of regulatory reform of U.S. freight transport, there is limited evidence related to long-term pricing trends by commodity in the deregulated era. Moreover, U.S. shipper groups have called for increased regulation of U.S. railroads, citing increased rates and profits, and monopoly pricing to “captive shippers.” This study estimates U.S. railroad revenue-marginal cost ratios for seven different commodities between 1986 and 2008. Interestingly, we find no significant increase in revenue-cost margins for commodities thought to be “most captive” (coal and chemicals), while finding large increases for some commodities thought to be “non-captive.” These results may provide insight into the impacts of regulatory reform in other countries, where there are similar concerns of equitable pricing and financial viability. They suggest that a move toward a more market-based pricing system can enhance railroad viability without harming those with fewer transport options.     

Parameter transfer of common-metric attributes in choice analysis: implications for willingness to pay

There is a growing literature that promotes the presence of a mix of compensatory and semi-compensatory processing strategies in the way that individuals evaluate packages of attributes in real or hypothetical markets, and make choices. This paper proposes a specification for the utility form in a choice model to test if, given a pair of attributes with a common-metric (e.g., components of travel time or cost), the attribute with the dominating level defines the marginal (dis)utility that is assigned to both attributes. We refer to this processing strategy as a parameter transfer rule. We use a stated choice data set, in the context of car driving individuals choosing between tolled and non-tolled routes, to estimate a mixed logit model which incorporates the presence of the parameter transfer rule and the conventional fully compensatory rule, both existing up to a probability. We find that if this parameter transfer heuristic is part of the mix, the WTP is more than 30% higher, on average, than when only a fully compensatory rule is imposed. We also contrast the parameter transfer rule with other semi-compensatory heuristics which have been investigated in other papers, and show that the finding adds further support to the accumulating evidence that a semi-compensatory attribute processing rules tend to result in higher mean WTP estimates compared to the fully compensatory attribute processing rule.     

Willingness to accept longer commutes for better salaries: Understanding the differences within and between couples

This paper reports on an analysis aiming to understand differences across individual people in their willingness to accept increased commuting time in return for higher salary, using Hierarchical Bayes (HB) analysis of a dataset collected in Sweden. We find that socio-demographic and attitudinal differences are significant in explaining the variations in values of time for individuals, in particular income, who drives when carpooling and hours worked per week. Additionally we also examine the values of individuals when their choices also impact on the salary and commute of their partner, finding that incomes, income differentials, driving behaviour when carpooling, division of housework and car user decisions significantly explain the values assigned to others and variations in an individual’s own values once their partner is affected. The overall richness of the results reflect the benefits that posterior analysis can bring, and highlight the computational efficiency of Bayesian methods in producing such conditionals at an individual level.