Unit income elasticity of the value of travel time savings

Mogens Fosgerau ()

Urban/Regional from EconWPA

Abstract: The paper presents an analysis of the income elasticity of the value of travel time savings (VTTS). It expands on previous micro-econometric estimates of the VTTS on binary choice experimental data by accounting for income taxes, for the dependence of trip length on income and for the stochastic distribution of the VTTS using semiparametric methods. Previous empirical estimates of the elasticity are around 0.6 while in practice i.a. Denmark and the UK (until 2004) apply a unit income elasticity for forecasting the future VTTS in economic evaluations of transport projects. This discrepancy may be resolved as shown in the paper.

Keywords: Willingness to pay; value of time; semiparametric; travel; transport (search for similar items in EconPapers)
JEL-codes: R22 R41 C14 C25 (search for similar items in EconPapers)
Date: 2005-08-23
Note: Type of Document - pdf; pages: 24
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpur:0508007

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