Cost and time damping: evidence from aggregate rail direct demand models

There is a significant body of evidence from both disaggregate choice modelling literature and practical travel demand forecasting that the responsiveness to cost and possibly to time diminishes with journey length. This has, in Britain at least, been termed ‘Cost Damping’, and is recognised in guidance issued by the UK Department for Transport. However, the consistency of the effect across modes and data types has not been established. Cost damping, if it exists, affects both the forecasting of demand and our understanding of behaviour. This paper aims to investigate the evidence for cost and time damping in rail demand using aggregate rail ticket sales data. The rail ticket sales data in Britain has, for many years, formed the basis of analysis of a wide range of impacts of rail demand. It records the number of tickets sold between station pairs, and it is generally felt to provide a reasonably accurate reflection of travel demand. However, the consistency of these direct demand models with choice modelling and highway demand model structures has not been investigated. Rail direct demand models estimated by ticket sales data indicate only slight variation in the fare elasticity with distance, as is evidenced in the largest meta-analysis of price elasticities conducted to date (Wardman, 2014). This study of UK elasticities shows strong variation between urban and inter-urban trips, presumably a segmentation at least in part by purpose, but less remaining variation by trip length. A lack of variation by length supports the hypothesis of cost damping, because constant cost sensitivity would imply that fare elasticity would increase strongly with distance, because of the increasing impact of higher fares at longer distances. In this paper we indicate that rail direct demand models have some consistency of behavioural paradigm with utility based choice models used in highway planning. We go on to use rail demand data to estimate time and fare elasticities in the context of various cost damping functions. Our empirical contribution is to estimate time elasticities on a basis directly comparable with cost elasticities and to show that the phenomenon of cost damping is strongly present in ticket sales data. This finding implies that cost damping should be included in models intended for multimodal analysis, which may otherwise give incorrect predictions

The demand for public transport: The effects of fares, quality of service, income and car ownership

This paper reports on key findings from a collaborative study whose objective was to produce an up-to-date guidance manual on the factors affecting the demand for public transport for use by public transport operators and planning authorities, and for academics and other researchers. Whilst a wide range of factors was examined in the study, the paper concentrates on the findings regarding the influence of fares, quality of service and income and car ownership. The results are a distillation and synthesis of identified published and unpublished information on the factors affecting public transport demand. The context is principally that of urban surface transport in Great Britain, but extensive use was made in the study of international sources and examples

New values of time and reliability in passenger transport in The Netherlands

We have established new values of time (VOTs) and values of travel time reliability (VORs) for use in cost-benefit analysis (CBA) of transport projects in The Netherlands. This was the first national study in The Netherlands (and one of the first world-wide) to investigate these topics empirically in a joint framework. Stated preference (SP) questionnaires were designed for interviewing travellers, where the hypothetical alternatives were described in terms of travel time, travel costs and travel time reliability, the latter being presented to the respondents in the form of five possible travel times having equal probability. For passenger transport, we first collected interviews using an existing internet panel. Additional data collection recruitment was done by asking travellers at petrol stations/service areas, parking garages, stations, bus stops, airports and ports to participate in the survey. One important conclusion is that the SP survey using members of this internet panel leads to substantially lower VOTs than the SP survey with en-route recruitment, probably because of self-selection bias in the internet panel. We estimated discrete choice models in which the values of time differ between trips with different time and costs levels, different time and costs changes offered in the SP, and different observed characteristics of the respondents (e.g. education, income, age, household composition). By using a panel latent class model, we also account for unobserved differences between respondents in the value of time and for repeated measurements/panel effects. The reference values of time and the reference reliability ratios were estimated on the 2011 sample only, but the effect of time and cost level, time and cost changes offered and socio-economic attributes was estimated on both the 2009 and 2011 samples

New appraisal values of travel time saving and reliability in Great Britain

© 2017, The Author(s). This paper provides an overview of the study ‘Provision of market research for value of time savings and reliability’ undertaken by the Arup/ITS Leeds/Accent consortium for the UK Department for Transport (DfT). The paper summarises recommendations for revised national average values of in-vehicle travel time savings, reliability and time-related quality (e.g. crowding and congestion), which were developed using willingness-to-pay (WTP) methods, for a range of modes, and covering both business and non-work travel purposes. The paper examines variation in these values by characteristics of the traveller and trip, and offers insights into the uncertainties around the values, especially through the calculation of confidence intervals. With regards to non-work, our recommendations entail an increase of around 50% in values for commute, but a reduction of around 25% for other non-work—relative to previous DfT ‘WebTAG’ guidance. With regards to business, our recommendations are based on WTP, and thus represent a methodological shift away from the cost saving approach (CSA) traditionally used in WebTAG. These WTP-based business values show marked variation by distance; for trips of less than 20miles, values are around 75% lower than previous WebTAG values; for trips of around 100miles, WTP-based values are comparable to previous WebTAG; and for longer trips still, WTP-based values exceed those previously in WebTAG

A highly successful model? The rail franchising business in Britain

A crucial feature of rail privatisation in Britain was franchising. Passenger services were franchised in competitive bidding processes to train operators which were meant to function with declining subsidy. The paper adopts the framework of social cost-benefit analysis to examine rail privatisation's impact on three key groups; consumers, producers and the government. It establishes that privatisation did not achieve all the supposed benefits. Further, franchising only appears to be profitable through the use of calculative accounting practices, where by franchised train operators are portrayed as discrete business entities, whereas they are supported by very substantial, ongoing direct and indirect government subsidies

A highly successful model? The rail franchising business in Britain

A crucial feature of rail privatisation in Britain was franchising. Passenger services were franchised in competitive bidding processes to train operators which were meant to function with declining subsidy. The paper adopts the framework of social cost-benefit analysis to examine rail privatisation's impact on three key groups; consumers, producers and the government. It establishes that privatisation did not achieve all the supposed benefits. Further, franchising only appears to be profitable through the use of calculative accounting practices, where by franchised train operators are portrayed as discrete business entities, whereas they are supported by very substantial, ongoing direct and indirect government subsidies