The Cost Of Convenience: Hedonic Travel Time Valuation

Isaac Mann and David M. Levinson
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David M. Levinson: TransportLab, School of Civil Engineering, University of Sydney

Working Papers from University of Minnesota: Nexus Research Group

Abstract: This paper presents a novel revealed-preference approach to estimating the value of travel time (VTT) and calculating consumer surplus for the economic evaluation of transport infrastructure. Departing from traditional stated-preference models, we derive time valuations by linking residential rental transactions in Greater Sydney to employment accessibility. We estimate a hedonic price function that controls for unobserved amenities and spatial sorting, recovering VTT estimates consistent with current cost-benefit analysis practice. Furthermore, we leverage the non-linearity of the price gradient, as well as cross-market variation in the price gradient, to perform a second-stage regression without instrumental variables, recovering the structural demand function for accessibility. This allows us to quantify welfare changes from non-marginal accessibility shocks, demonstrated on the Sydney Metro West project, grounding project appraisal in revealed spatial behavior.

Keywords: transportation; transport economics; transport networks (search for similar items in EconPapers)
JEL-codes: R40 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-ppm and nep-tre
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Published in Journal of Regional Science jors.70065

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https://doi.org/10.1111/jors.70065 Published version landing page, 2026 (text/html)

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Persistent link: https://EconPapers.repec.org/RePEc:nex:wpaper:paper-2026-10

DOI: 10.1111/jors.70065

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