The value of travel time: random utility versus random valuation

Abstract

This paper identifies, relates and compares two popular modelling approaches to estimate the value of travel time changes. The first (random utility [RU]) assumes that the random component of the model relates to the difference between the utilities of travel options; the second (random valuation [RV]) assumes that it relates to the difference between the value of travel time and a suggested valuation threshold. This paper gives details of the theoretical relationship between the two approaches and compares them empirically at several levels of model sophistication. Datasets from two national studies (the UK and Denmark) are employed. The results show a consistent superiority of the RV approach and a systematic gap in the value of travel time between approaches. A similar pattern across models is found in both countries. This raises questions about the validity of results using the RU approach. The analysis has direct implications for both researchers and policy-makers