APPLICATIONS OF VALUE OF TRAVEL TIME TO ECONOMIC EVALUATION OF TRANSPORT INVESTMENT ALTERNATIVES

This review of conventional evaluation techniques and the changing viewpoints and techniques of economic evaluation focuses on the principal techniques applied to transportation investment, the estimation and uses of travel time values, and the value of travel time in cost-effectiveness analyses. The implications of the value of travel time for techniques involving cost-benefit estimation are also examined. The primary constituents of user benefits are reduced travel time and reduced automobile operating costs. This gives rise to the need to convert time savings in minutes to an equivalent monetary value. An attempt is made to establish what time values are relevant for economic evaluation, and it is stated that nonworking time has value and that this value should be used to determine benefits accruing from transport projects that results in time savings. The value of travel time will enter the evaluation process through the procedures for estimating future use and travel times on a new transportation facility. The problems encountered in such user of travel time values are discussed. These include the possible inaccuracies in travel time estimations, the estimation of monetary value of time savings, the problems associated with variations in travel time value, and estimation of the amount of induced traffic. The value of induced travel time and time savings, together with the issue of consumer surplus are also discussed. An alternative evaluation technique that is superseding cost- benefit analyses is cost-effectiveness. In this technique, which is based on the systems analytic approach to transportation planning and which does not require the conversion of time savings into monetary terms, the achievement of certain time savings may be expressed as a goal of the transportation project. This can be directly assessed for effectiveness. Use of cost-effectiveness will lead to changes in uses of the values of travel time and travel time savings. Such values will assume increased importance in determining goal achievement and in permitting goal modification in an evaluation process that seeks to achieve prespecified goals.

• Record URL:
  http://onlinepubs.trb.org/Onlinepubs/trr/1976/587/587-004.pdf
• Summary URL:
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• Supplemental Notes:
  • Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.
• Authors:
  • Stopher, Peter R
• Publication Date: 1976

Media Info

• Media Type: Digital/other
• Features: References;
• Pagination: pp 19-23
• Monograph Title: Value of travel time
• Serial:
  • Transportation Research Record
  • Issue Number: 587
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Benefit cost analysis; Cost effectiveness; Economic conditions; Economic impacts; Investments; Present value; Productivity; Travel time
• Uncontrolled Terms: Time savings; Value
• Subject Areas: Economics; Highways; Operations and Traffic Management; Planning and Forecasting; Society;

Filing Info

• Accession Number: 00141940
• Record Type: Publication
• ISBN: 0309025532
• Files: TRIS, TRB
• Created Date: Apr 13 1977 12:00AM