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

Antonio Bento (), Kevin Roth and Andrew Waxman

No 26956, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Taking advantage of repeated appearances of drivers in Los Angeles’s ExpressLanes under varied traffic conditions, we uncover the distribution of individuals’ preferences for time savings in a novel application of a hedonic pricing model. In this setting, we introduce the concept of the value of urgency, defined by a component of willingness to pay to enter tolled lanes 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. We show that this value accounts for 87% of total willingness to pay to use the ExpressLanes, while the contributions to WTP from other widely used valuation measures, such as the values of time and reliability, 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 avoid lateness and reveal their preferences for urgency.

JEL-codes: D47 D61 D62 H23 L51 L91 Q58 R41 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-ore, nep-tre and nep-ure
Note: EEE IO PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Journal Article: The Value of Urgency: Evidence from Real-Time Congestion Pricing (2024)
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