Appraisals and evaluations were a new and interesting topic for me to explore this week and I will be reflecting on this subject today. Specifically, I want to highlight the problematic task with placing a value of time travel and the possibility of doing so for active transportation. Placing a value on our time is a fascinating concept. As postulated in the literature, in using a set of values of time, the economic benefits of a transport project can be quantified in order to compare them to the costs, thus forming the basis of cost-benefit analysis.
The most fascinating take away for me in looking at this is that the value of time varies considerably from person to person and depends upon the purpose of the journey - for instance, is the person attending a job interview or are they simply heading out to get a coffee? Are they meeting someone, or are they going alone? Do they need to cross a dangerous intersection? Valuing time accurately is fraught with complexities and using a single value doesn't always capture the many variables and circumstances at play.
This also brings up the issues of valuing active transport. Unique to active transport modes is that you can't work while you undertake these activities - so our value of time may increase. It's also important to note that unlike motorised trips which are usually undertaken to consume an activity at a destination, many active transport trips are discretionary and occurring for their own sake. For instance, I primarily walk when I take my dogs out at night. It also appears that numerous co benefits of these modes exist due to climate change mitigation and health, however due to the complexity in translating these to monetary values, they are often poorly undertaken or omitted from investment appraisals. I believe it is critical that we are able to adequately represent the likely impacts and benefits, especially the societal costs on a inactive nation (ie. greater in-hospital patient care).
Good post Elizabeth - thanks. You raise a very good point about how value of time can vary by the purpose of the trip (i.e. job interview vs getting a coffee) and also by the characteristics of the trip (i.e. needing to cross a busy intersection). Another important consideration for value of time is that it also varies by person - of course a CEO of a large company is going to have a higher value of time than a high school student.
ReplyDeleteConsider the generalised cost of a bus trip compared to a car (as driver) trip. If you take household travel survey data and look at a frequency chart of trip duration you will see that bus users are willing to accept longer travel times for a given trip purpose (say commuting) than car drivers. This implies that they have lower values of time than the car driver. But it doesn't tell us why their value of time is lower. You might expect that the same person would have a lower value of time on the bus compared to the car as they can read a book, make a call or look out the window and enjoy the scenery instead of having to battle traffic. On the other hand, the bus might have some annoying or unsavoury characters on it which might increase the value of time. Finally to complicate everything - does the sample of all bus users versus car drivers vary in terms of socioeconomic status? The answer is likely yes, and this will also affect the value of time. This makes the choice of what value of time to adopt for project appraisal a difficult one. If you have lower value of time on public transport than road, you will bias the appraisal process towards favouring road projects. As a result, value of time is kept constant regardless of mode.
This is a fascinating topic and I suggest you read some of Hensher's work on it if you want to explore the topic further.
Elizabeth,
ReplyDeleteFirst off I really like the way you have used an image in your posts.
Your comment about your walk with the dogs and the implications for valuing time in active transport also go me thinking about my travel to work. My decision to ride to work (as often as I can but not every day) is primarily motivated by health benefits. While I would not mind cutting down the delays when I wait at the lights to cross a couple of busy roads, I certainly don't want to continue to minimise my bike travel time. I suppose that means I have a non-linear value of travel time savings.
I agree with Renan that David Hensher has done a lot of research on the topic of valuing travel time savings. Neil Douglas (from NZ) also published a couple of papers at this year's ATRF conference. Those papers are available from the ATRF web site (http://atrf.info/).
Geoff