The Value of Urgency: Evidence from Real-Time Congestion Pricing

Antonio Bento, Kevin Roth and Andrew Waxman

Journal of Political Economy Microeconomics, 2024, vol. 2, issue 4, 786 - 851

Abstract: In the setting of Los Angeles’s ExpressLanes, we uncover the distribution of individuals’ preferences for time savings in a novel application of a hedonic pricing model. We introduce the concept of the value of urgency, defined by willingness to pay (WTP) a toll to avoid a congested alternative route. The value of urgency does not scale in the amount of time saved, reflecting discrete penalties for late arrival. This value accounts for 87% of total WTP to use the ExpressLanes, while the contributions to WTP from other widely used valuation measures are negligible. We suggest that quality-of-service pricing that varies in real time and removes uncertainty over travel times creates new markets for individuals to reveal their preferences for urgency.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1086/731832 (application/pdf)
http://dx.doi.org/10.1086/731832 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: The Value of Urgency: Evidence from Real-Time Congestion Pricing (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpemic:doi:10.1086/731832

Access Statistics for this article

More articles in Journal of Political Economy Microeconomics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().