The value of time and external benefits in bicycle appraisal

Maria Börjesson and Jonas Eliasson ()
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Maria Börjesson: KTH, Royal Institute of Technology, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

No 2011:22, Working papers in Transport Economics from CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: We estimate the value of time savings, different cycling environments and additional benefits in cost-benefit analysis of cycling investments. Cyclists’ value of travel time savings turns out to be high, considerably higher than the value of time savings on alternative modes. Cyclists also value other improvements highly, such as separated bicycle lanes. As to additional benefits of cycling improvements in the form of health and reduced car traffic, our results do not support the notion that these will be a significant part in a cost-benefit analysis. Bicyclists seem to take health largely into account when making their travel choices, implying that it would be double-counting to add total health benefits to the analysis once the consumer surplus has been correctly calculated. As to reductions in car traffic, our results indicate that the cross-elasticity between car and cycle is low, and hence benefits from traffic reductions will be small. However, the valuations of improved cycling speeds and comfort are so high that it seems likely that improvements for cyclists are cost-effective compared to many other types of investments, without having to invoke second-order, indirect effects. In other words, our results suggest that bicycle should be viewed as a competitive mode of travel and not primarily as a means to achieve improved health or reduced car traffic.

Keywords: Cost benefit analysis; Value of time; Bicycle (search for similar items in EconPapers)
JEL-codes: R41 R42 R48 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-12-13
New Economics Papers: this item is included in nep-ene and nep-ure
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Citations: View citations in EconPapers (1)

Published as Börjesson, Maria and Jonas Eliasson, 'The value of time and external benefits in bicycle appraisal' in Transportation Research A, 2012, pages 673-683.

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Journal Article: The value of time and external benefits in bicycle appraisal (2012)
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