Inter-temporal variations in the value of time

INTRODUCTION The objective of the research reported here is to examine how the value of time varies over time. A key factor in inter-temporal variations in the value of time is expected to be the impact of income growth, although changes in other socio-economic, demographic, attitudinal, employment and travel characteristics could also lead to variations in the value of time over time. The most widely held convention relating to the adjustment of recommended values of time over time is that they should be linked proportionately to growth in some measure of income. No consideration is given to possible changes in the value of time for other reasons. Even disregarding the latter issue, there is no reason from a theoretical standpoint why the income elasticity for private travel should be unity since it is a matter of personal preference how an individual or household allocates additional income to time savings. In contrast, the case for a close link between the value of time and income is much stronger for business travel. Official recommendations in Britain, as elsewhere, increase the value of non-work travel time over time in line with growth in income. DETR’s Transport Economics Note specifies that both work and non-work time values should be increased in line with real GDP per head. Beesley (1971) pointed out various sources of variation in the value of time over time and, on the basis of the uncertainty as to even the direction in which the values might vary, he argued for in favour of a zero trend value. The first British national value of time study (MVA et al., 1987) claimed that a constant real value of time was on theoretical grounds “equally logical and defensible” as the convention of linking the value of time to income growth. However, it was recognised that there did seem to have been an increase in the value of time over time. It was concluded that, “We do not feel able, therefore, in the absence of any specific work on this topic within our programme, and given the existence of plausible arguments in contrary directions, to come to any firm conclusions. The matter must remain on the agenda for further investigation”. A large amount of recent evidence, which we shall cover, is being taken to indicate that the income elasticity for the value of time spent in private travel is far less than unity. It is important that such a challenge to the widely used convention is tested against the widest body of evidence possible before any conclusions are drawn, particularly given the implications of amended recommendations for practical project evaluations. The aim of this paper is to review the existing evidence relevant to inter-temporal variations in the value of time and to present some fresh empirical evidence. The approach adopted here is threefold. Firstly, we examine the cross-sectional variations in the value of time with income apparent from a number of empirical studies, both British and from other countries, and we develop a model to explain cross-sectional income elasticities across British studies. Secondly, the opportunity exists of analysing two data sets obtained from the same SP design conducted in the same area but at different points in time. Finally, variations in values of time over time are analysed by means of ‘meta-analysis’ of a large data set of British empirical evidence. The structure of this report is as follows. Section 2 contains a discussion of various background issues relating to theoretical maters, methodology and previous findings. Section 3 reports analysis of cross-sectional variations in values of time with income whilst section 4 reports on joint analysis of two data sets collected in the first and second national value of time studies commissioned by the Department of Transport. Section 5 reports the findings of our meta-analysis of a large body of British evidence on the value of time. A discussion of the various findings is provided in section 6 and concluding remarks are provided in section 7. The final stage of the study will draw together this evidence to form recommendations concerning the value of time over time

Route Choice and the Value of Motorists’ Travel Time: Theoretical and Methodological Issues

In June 1985, a survey of motorists makng urban journeys within Tyne and Wear was undertaken as part of the Department of Transport's research project into the value of time. This paper considers the theoretical and methodological issues involved in estimating the value that motorists' place upon travel time savings from their actual route choices and their responses to a simulated route choice experiment. The reasons for undertaking this survey and for choosing this particular location are discussed. The experimental design and the modelling technique used in the stated preference analysis are examined and the problems which face both a revealed preference and a stated preference investigation of motorists' route choices are considered. One of the aims of the study is to consider variations in the value of time according to socio-economic factors and journey characteristics. The theoretical sources of variations in the value of time are discussed as is the modelling approach which was adopted to analyse these potential variations. The empirical findings from the actual survey of motorists making urban journeys is the subject of a subsequent working paper

Public transport values of time

OBJECTIVES The objectives of this aspect of the study are to provide recommended valuations of: • Public transport in-vehicle time (IVT) • Walk time • Wait time/headway with appropriate modifiers according to key factors such as: • Mode user type • The mode to which the value relates • Journey distance and inter urban or urban context • Journey purpose A recommended procedure for updating values of time over time is also required. Although this issue is touched upon in this paper, a more detailed analysis is the subject of a separate aspect of the study and is reported in Working Paper 566. The Accent and Hague Consulting Group study did not cover public transport. Nor is this study conducting fresh empirical research. We must therefore base our recommendations on other existing studies. Fortunately, there is a wealth of British evidence on the value of time. Section 2 provides some background to the valuations of time for public transport users and the valuation of attributes which are important aspects of public transport use. Section 3 details the additional data that has been collected to enhance our previous data sets upon which we have conducted meta-analysis (Wardman, 2001) whilst Section 4 presents tabulations of the money values of time, and the time values of walk, wait and headway, disaggregated as far as is sensible by purpose, mode and whether the journey is urban or inter-urban. Section 5 describes the principal approach that we have adopted to explain the values of time obtained from the many different studies that are available to us. Section 6 is concerned with a regression model estimated to the money values for all travellers. From this model are extracted the money values of time and the IVT equivalent values of walk time, wait time and headway for public transport users. The IVT values can be expressed as absolute values or as relative to car users’ values. The latter is useful where recommended public transport values are derived as a series of modifiers to car users’ values. As a check of the IVT values of walk, wait and headway implied by the model estimated to money values, we report in section 7 a model estimated solely to the IVT values of walk, wait and headway. Concluding remarks are provided in section 8. Recommendations and comparisons with other aspects of the study are a feature of Working Paper 567

Route Choice and the Value of Motorists’ Travel Time: Theoretical and Methodological Issues

In June 1985, a survey of motorists makng urban journeys within Tyne and Wear was undertaken as part of the Department of Transport's research project into the value of time. This paper considers the theoretical and methodological issues involved in estimating the value that motorists' place upon travel time savings from their actual route choices and their responses to a simulated route choice experiment. The reasons for undertaking this survey and for choosing this particular location are discussed. The experimental design and the modelling technique used in the stated preference analysis are examined and the problems which face both a revealed preference and a stated preference investigation of motorists' route choices are considered. One of the aims of the study is to consider variations in the value of time according to socio-economic factors and journey characteristics. The theoretical sources of variations in the value of time are discussed as is the modelling approach which was adopted to analyse these potential variations. The empirical findings from the actual survey of motorists making urban journeys is the subject of a subsequent working paper

Factors influencing the propensity to cycle to work

This paper describes the development of a mode choice model for the journey to work with special emphasis on the propensity to cycle. The model combines revealed preference (RP) and stated preference (SP) data to form a very large and comprehensive model. RP data from the National Travel Survey was combined with a specially commissioned RP survey. A number of SP surveys were also undertaken to examine the effects of different types of en-route and trip end cycle facilities and financial measures to encourage cycling. The development of the model is described in detail. The model was used to forecast trends in urban commuting shares over time and to predict the impacts of different measures to encourage cycling. Of the en-route cycle facilities, a completely segregated cycleway was forecast to have the greatest impact, but even the unfeasible scenario of universal provision of such facilities would only result in a 55% increase in cycling and a slight reduction in car commuting. Payments for cycling to work were found to be highly effective with a £2 daily payment almost doubling the level of cycling. The most effective policy would combine improvements in en-route facilities, a daily payment to cycle to work and comprehensive trip end facilities and this would also have a significant impact on car commuting

Route Choice and the Value of Motorists’ Travel Time: Empirical Findings

This paper contains the empirical findings from a study of motorists' route choices. The purpose of this study was to estimate the value that motorists' place upon time savings when making urban journeys. Revealed preference models of travel behaviour are develaped for commuting and leisure journeys and a stated preference experiment is undertaken for these two journey plrposes and additionally for those making journeys in the course of their work. Although the stated preference method is seen to have several advantages over the revealed preference approach in this route choice context; there is the crucial question of whether stated preferences correspond with actual preferences. Various revealed preference and stated preference models of travel behaviour are presented and the results obtained by the two methods are compared in a variety of ways. The findings of these comparisons suggest that stated preferences are an accurate reflection of actual preferences and that such data can be usefully employed for the purpose of valuing travel time savings. A feature of the study is an investigation into how the value of time varies with socio-economic factors. A method for analysing variations in the value of time due to socio-economic variables is outlined and successfully applied to reveal a number of factors influencing the value of time. A comparison of reported and engineering values was also undertaken which suggests that there is misreporting of attribute values

Stated choice valuation of traffic related noise

This paper reports a novel application of the stated choice method to the valuation of road traffic noise. The innovative context used is that of choice between apartments with different levels of traffic noise, view, sunlight and cost with which respondents would be familiar. Stated choice models were developed on both perceived and objective measures of traffic noise, with the former statistically superior, and an extensive econometric analysis has been conducted to assess the nature and extent of householders’ heterogeneity of preferences for noise. This found that random taste variation is appreciable but also identified considerable systematic variation in valuations according to income level, household composition and exposure to noise. Self-selectivity is apparent, whereby those with higher marginal values of noise tend to live in quieter apartments. Sign and reference effects were apparent in the relationship between ratings and objective noise measures, presumably reflecting the non-linear nature of the latter. However, there was no strong support for sign, size or reference effects in the valuations of perceived noise levels

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

Noise and air quality valuations: evidence from stated preference residential choice models

This paper reports on research which has estimated valuations of changes in traffic related noise levels and air quality and which contributes to the body of knowledge and to methodology in this area. There are several novel aspects of this research. Firstly, there have been relatively few stated preference studies of the monetary valuations of traffic related noise and air quality. A feature of this analysis is the examination of variations in values according to the size and sign of the environmental change, the currently experienced level of the attribute and various socio-economic factors. Secondly, the important issue of presentation is addressed, with two different methods used in the valuation of air quality and links made between valuations and physical measures. Thirdly, the results from stated preference and the contingent valuation method are compared. Finally, we bring together evidence from other studies and compare them with the findings obtained here

Valuation of aircraft noise by time of day: a comparison of two approaches

This paper reports an innovative application of stated preference techniques to derive values of aircraft noise by time of day and day of week. Revealed preference techniques cannot provide such segmentations which would clearly be of use in policy development especially relating to airport operations. Given the lack of research on this issue the work reported here is highly experimental. Two stated preference experiments were designed. The first focussed on a single time period whilst the second asked respondents to trade between time periods. Both approaches yielded results that are plausible and mutually consistent in terms of relative values by time period. We conclude that stated preference techniques are particularly useful in this context where the use of aggregated values may lead to non-optimal policy decisions