Is the intertemporal income elasticity of the value of travel time unity?

Jan-Erik Swärdh ()
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Jan-Erik Swärdh: VTI, Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden

No 2008:3, Working Papers from Swedish National Road & Transport Research Institute (VTI)

Abstract: The purpose of this study is to estimate the intertemporal income elasticity of the value of travel time (VTT) and test whether it differs from one. The empirical analysis is performed on Swedish revealed preference data, where voluntary job changers' individual wage premium for commuting time changes is used as an estimate of VTT. The panel structure of the data implies the opportunity to use a lagged net income variable on individual level to estimate the income elasticity in an intertemporal way. The result does not support an intertemporal income elasticity of VTT that is different from one and this result is robust over several different empirical specifications. Hence, the policy implication of this study is in contrast to a recent recommendation by an EU-financed project, Heatco, which propose an intertemporal income elasticity of 0.7.

Keywords: Value of travel time; Value of travel time savings; VTTS; Intertemporal; Income elasticity; Revealed preferences (search for similar items in EconPapers)
JEL-codes: C20 C81 R41 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2008-04-28
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:vtiwps:2008_003

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