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Value of travel time changes - theoretical and empirical issues
1. The Value of Travel Time Changes:
Theoretical and Empirical issues
Doctoral Student Research in Transportation Modelling
TRB
Washington - 11th January, 2015
Manuel Ojeda Cabral
Research Fellow in Travel Behavior Modelling
Institute for Transport Studies, University of Leeds
3. Valuation of Time
TRAVEL OPTION 1 TRAVEL OPTION 2
(money) COST 30£ 50£
TIME 2h. 15 min. 1h. 15 min.
∆Time = 60 minutes
∆Cost = £20
Assumption: We can find it in people’s choices that involve a trade-off
between money and time. [Stated Choice experiments often used].
4. Valuation of Time
Current train High-Speed Rail
(money) COST 30£ 50£
TIME 2h. 15 min. 1h. 15 min.
e.g. Travelling from Leeds to London
The Value of Travel Time Changes is a key input for Cost-
Benefit Analysis, and therefore for Government decisions on
transport investments.
Implied “Price of Time” of
20£/hour. Did you accept it?
5. Thesis overview
Chapter 1: How does the VTTC vary across&within
people?
Chapter 2: Random Utility vs Random Valuation
Chapter 3: The role of Stated Choice design variables
Main contributions
Applications/analyses of state-of-the-art models
Study of heterogeneity in the Value of Travel Time
Influence of experiments
The Value of Travel Time Changes (VTTC)
6. Both derived from Microeconomic Theory
𝑈𝑖 = (𝑉𝑖, 𝜀𝑖)
where: 𝑉𝑖 = 𝛽𝑐 𝑐𝑖 + 𝛽𝑡 𝑡𝑖
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑇𝑟𝑎𝑣𝑒𝑙 𝑇𝑖𝑚𝑒 =
𝛽𝑡
𝛽 𝑐
;
Difference: how is the 𝜀𝑖 introduced?
The Value of Travel Time
Random Utility Random Valuation
𝑈1 = 𝛽𝑡 ∗ 𝑡1 + 𝛽𝑐 ∗ 𝑐1 + 𝜀1
𝑈2 = 𝛽𝑡 ∗ 𝑡2 + 𝛽𝑐 ∗ 𝑐2 + 𝜀2
(𝑅𝑈)
𝑈1 = μ ∗ BVTTC + 𝜀1
𝑈2 = μ ∗ VTTC + 𝜀2
(𝑅𝑉)
𝑏𝑉𝑇𝑇𝐶 =
∆𝑐
∆𝑡
7. The Value of Travel Time
Approx.
current
Danish VTTC
0
20
40
60
80
100
120
Base Ln Ln+Cov Ln+Cov+Rand
VTTC
(DKK/h)
Model extension
Mean Value of Time across models - Danish data
RU approach
RV approach
8. The Value of Travel Time
Approx.
current
UK VTTC
0
1
2
3
4
5
6
7
8
9
10
Base Ln Ln+Cov Ln+Cov+Rand
VTTC
(p/min)
Model extension
Mean Value of Time across models – UK data
RU approach
RV approach
RandomValuation > RandomUtility (model fit)
9. Value of Time increases with income, and with distance ??
Target: a set of VTTC (example below: the last UK study)
Source: Official VTTC UK study - Mackie et al. (2003)
The VTTC: how does it vary?
10. The VTTC: the role of design variables?
Stated Choice
experiment
Set of VTTC
𝐵𝑜𝑢𝑛𝑑𝑎𝑟𝑦𝑉𝑇𝑇𝐶 =
∆𝐶𝑜𝑠𝑡
∆𝑇𝑖𝑚𝑒
- Mean VTTC
- Income elasticity
- Distance elasticity
- Etc.
A) Influence of BVTTC, ∆T & ∆C: part of individuals’ true preferences? UNKNOWN.
B) In any case, if model estimates are different in different settings, then by focussing
the survey on specific settings, our sample level results will be affected
accordingly.