Valuations of travel time variability in scheduling versus mean-variance models

Publisher's full text
Jonas Eliasson
Joel Franklin

The standard method of estimating the value of travel time variability for use in policy appraisal is to estimate the parameters of a reduced-form utility function, where some measure of travel time variability (such as the standard deviation) is included. A problem with this approach is that the obtained valuation will in general depend on the standardized travel time distribution, and hence cannot be transferred from one context to another. A recently suggested remedy for this problem has been to estimate a scheduling model, which in theory is transferrable, and use the implied reduced-form to derive valuations for use in appraisal.

In this paper we estimate both a scheduling model and the implied reduced-form model, using stated choice data. The valuation of travel time variability implied by the scheduling model turns out to be substantially smaller than what is obtained from a reduced-form model estimated on the same sample. The results suggest that the scheduling model does not capture all of the disutility arising from travel time variability. Hence, although it can be shown that scheduling and reduced-form models are theoretically equivalent, that hypothesized equivalence is not reflected in the empirical evidence. We speculate that the derivation of reduced-form models from an underlying scheduling model omits two essential features: first, the notion of an exogenously fixed "preferred arrival time" neglects the fact that most activities can be rescheduled given full information about the travel times in advance, and second, disutility may be derived from uncertainty as such, in the form of anxiety, decisions costs or costs for having contingency plans. We also report our estimates of the valuation of travel time variability for public transit trips, for use in applied appraisal.

MEET US


25-26
Apr

Cost Benefit Analysis (CBA) workshop in Stockholm

An open seminar and workshop in Stockholm will be held on 25-26 April 2018. The workshop deals with the use of CBA as a basis for decision-making in the public sector. The workshop is organized by, among others, Professor Jan-Eric Nilsson, VTI.

LATEST NEWS


2018-02-19

Modal shift for an environmental lift?

Investigations in Sweden and other countries suggest a shift of goods transport from road to rail and waterborne transport to reach environmental and climate objectives. VTI is leading a new project to investigate how the modal shift can contribute and what...


2018-02-13

Automation and digitalisation are making rail competitive

Road transport is developing rapidly and its productivity has increased sharply. Rail transport, however, has not developed at the same rate. Automation and digitalisation are essential if rail freight in Europe is to survive.


2018-02-08

New research is creating a driverless logistics chain

The research project Born to Drive has come up with a system that allows new cars to move, without a driver, from the production line out to the parking area prior to being transported elsewhere. The vision is to automate the entire logistics chain from...


2018-02-05

VTI testing automation in EU project

VTI is leading a series of tests in a major EU project on automated driving. The first driving tests were carried out n a test track in Slovenia in December. The project will focus in part on acceptance among different groups in society, in part on...


2018-02-02

Freight transportation on road and rail analysed

Freight transport accounts for a large proportion of the emissions, noise and congestion produced by road traffic. Transporting freight in larger but fewer lorries could reduce the problem. At the same time it might entail freight being diverted from more...


2017-11-30

Millions for research into maritime transport and the environment

Maritime transport is a major source of emissions of harmful air pollutants and carbon dioxide. In a new project, a research team from the Swedish National Road and Transport Research Institute (VTI) and the University of Gothenburg has received SEK 6.4...