The value of business travel time savings

Abstract

The value of time savings for business travellers forms a sizeable part of the benefits from trunk road, rail and air transport improvement schemes. It is therefore important to possess appropiate values to place on business travel time savings for evaluation purposes. The normal approach in practice is to adopt the wage rate of the workers in question plus an increment for overheads and non-wage payments. In this paper criticisms of this approach are discssed and the implications of these criticims for the development of alternative methodologies for valuing business travel time savings are considered. Data fron two surveys of long distance business travellers and one survey of employers, which were carried out as part of an SERC financed project on business travel, is used to estimate values of business travel time savings for each of these different methodologies. Unlike previous studies considerable use is made of data obtained from stated preference experiments. Revealed preference data is also used to obtain value of time estimates. The results show that, for forecasting purposes, a value a little above the conventional 'wage rate plus' vaue may be appropriate. Although no empirical support is found for the assumptions on which present valuation conventions are based, the empirical results suggest these conventions yield values which are approximately correct, for our samples