VALUE OF TRAVEL TIME

The value of time is the amount that a traveler would be willing to pay in order to save time, or the

amount they would accept as compensation for lost time

AIM

To determine the value of travel time using revealed preference approach.

To study the choice people make when forced with a number of alternate modes involving different cost and time for the journey.

SIGNIFICANCE

Time and delay related benefits of building highway facilities is typically based on evaluation of the average travel time savings.

It is highly relevant in an economic analysis of transportation schemes.

Values of time are used to calculate the non-monetary costs incurred as part of a journey

CLASSES OF TRANSPORT USERS ENJOYING TRAVEL TIME SAVINGS1.Passengers :

Passengers are the most conspicuous class of transport users.

They enjoy benefits due to reduction in travel time by using different transport modes

2.Transport operators and owners : Transport operators are direct beneficiaries of travel

time savings with improved highway facilities. They can run their vehicles at higher speeds and longer distance this will result in a greater utilization of vehicles.

3. FREIGHT CONSIGNERS

◦ For freight consigners, travel time is of considerable importance in case of perishable commodities, such as milk fruits and vegetables.

◦ For freight consigners, speedier transportation means lesser inventory costs.

1.Willingness to pay

Particular situation facing by the individual will influence

his willingness to pay to a considerable extent. Eg: income, comfort, journey during

working/leisure hours The journeys made during leisure hours do

not reduce his output but will restrict his persuit of pleasures that are more enjoyable than travel.

ECONOMIC CONCEPT OF EVALUATION OF TRAVEL TIME SAVINGS

2.Time as commodityTime has utility just as any other

commodity and hence a cost.The time saved in journeys can be put in to

fruitful use by a great turn-round of the vehicle utilization.

Time and services are complementary economic commodities because their respective prices cannot be separately evaluated.

ISSUES CONNECTED WITH EVALUATION OF TIME SAVINGS ENJOYED BY

PASSENGERS1.Minor time savings:

◦Time saved has economic value only if it is immediately put to use on realization.

◦It has become the general practice to treat minor time savings of order 5-10 minutes as additive and, therefore, accept them as significant.

3. Time saving in developing counties: There is a considerable unemployment and under-

employment in the developing countries and the wage levels are different.

So, evaluate the time saving rate very carefully considering the composition of the persons travelling, including the unemployed children and housewives.

DIFFERENT APPROACHES

• Wage rate approach

• Opinion survey approach

• Revealed preference approach

• Housing price approach

• Choice of destination of trip

METHODOLOGY

Revealed preference approach

Minimum valuation of preferred mode :VR(min) =

Maximum valuation of time of rejected mode:

VR(max)=

CA-CB

TA-TB

CB-CA

TA-TB

DATA COLLECTION AND ANALYSIS

• Survey method: by questionnaire approach

The questionnaire has 3 major sections

Personal characteristics

Trip data

Data regarding mode of travel and cost

ANALYSIS

Comparison between distance and value of travel time for train travelers

<75 75-150 150-225 >2250

50

100

150

200

250

300

350

400

Distance (Km)

min

imum

val

ue o

f tim

e(R

s/hou

r)

Comparison between distance and value of travel time for train travelers

<75 75-150 150-225 >2250

50

100

150

200

250

300

350

400

450

distance (Km)

max

imum

val

ue o

f tim

e (R

s/hou

r)

Comparison between income and value of travel time for train travelers

0-15000 1500-3000 30000-45000 >4500000

50

100

150

200

250

300

350

income (Rs)

valu

e ot

tra

vel t

ime

(Rs/

hr)

Main reasons for choosing train as mode of transport instead of bus

faster

cheap

er

less w

aiting

time

comfor

toth

er

avoid t

raffic ja

ms0

10

20

30

40

50

60

70

percentage

Reason for choosing bus as mode of transport instead of train

faster

cheap

er

less w

aiting

time

comfor

toth

er

avoid t

raffic ja

ms0

10

20

30

40

50

60

percentage

CONCLUSION

Estimation of the monetary value of travel time is important in cost benefit for a transportation project

The value of travel time mainly depends upon Trip purpose Trip distance Mode used Income

Cost for train is more than that of bus and the travel time for train is less than that of bus

value of travel time for both bus and train travelers increase with increase in income.

The main reasons to prefer train as travel mode are

Faster comfort

The main reasons to prefer train as travel mode are

Cheaper Less waiting time

THANK YOU