On the income elasticity of the value of travel time

TY - JOUR

T1 - On the income elasticity of the value of travel time

AU - Börjesson, Maria

AU - Fosgerau, Mogens

AU - Algers, Staffan

PY - 2012/2

Y1 - 2012/2

N2 - Transport infrastructure is long-term and in appraisal it is necessary to value travel time savings for future years. This requires knowing how the value of time (VTT) will develop over time as incomes grow. This paper investigates if the cross-sectional income elasticity of the VTT is equal to inter-temporal income elasticity. The study is based on two identical stated choice experiments conducted with a 13. year interval. Results indicate that the relationship between income and the VTT in the cross-section has remained unchanged over time. As a consequence, the inter-temporal income elasticity of the VTT can be predicted based on cross-sectional income elasticity. However, the income elasticity of the VTT is not a constant but increases with income. For this reason, the average income elasticity of the VTT in the cross-sections has increased between the two survey years and can be expected to increase further over time.

AB - Transport infrastructure is long-term and in appraisal it is necessary to value travel time savings for future years. This requires knowing how the value of time (VTT) will develop over time as incomes grow. This paper investigates if the cross-sectional income elasticity of the VTT is equal to inter-temporal income elasticity. The study is based on two identical stated choice experiments conducted with a 13. year interval. Results indicate that the relationship between income and the VTT in the cross-section has remained unchanged over time. As a consequence, the inter-temporal income elasticity of the VTT can be predicted based on cross-sectional income elasticity. However, the income elasticity of the VTT is not a constant but increases with income. For this reason, the average income elasticity of the VTT in the cross-sections has increased between the two survey years and can be expected to increase further over time.

KW - CBA

KW - Cross-section income elasticity

KW - Income elasticity

KW - Inter-temporal income elasticity

KW - Temporal transferability

KW - Value of travel time

UR - http://www.scopus.com/inward/record.url?scp=81155138363&partnerID=8YFLogxK

U2 - 10.1016/j.tra.2011.10.007

DO - 10.1016/j.tra.2011.10.007

M3 - Journal article

AN - SCOPUS:81155138363

SN - 0965-8564

VL - 46

SP - 368

EP - 377

JO - Transportation Research Part A: Policy and Practice

JF - Transportation Research Part A: Policy and Practice

IS - 2

ER -