Variations in the Value of Travel Time Savings: Empirical Studies and the Values for Road Project Evaluation

Abstract

This paper focuses on the variations in values of travel time savings (VTTS) found in different empirical studies and used for road project evaluation in a number of countries and jurisdictions. Estimates of VTTS, expressed as a percentage of the wage, from 56 empirical studies show a substantial range, over a ten-fold variation. The estimates cluster between about 30 to 50 percent of the wage, but this is still sizeable variation across studies. The VTTS used for road project evaluations are compiled from a number of agencies and countries, and expressed in a common currency. The range of values is substantial, not just across countries but across agencies within a country. Because of the importance of time savings in transport project evaluation, this implies considerable inconsistency in the application of economic analysis to road project evaluation in different jurisdictions. There is a need not only for more research on VTTS but more communication about the figures being used in project evaluation frameworks.