Estimation of Value of Travel Time Savings Using Willingness-to-Pay Method

Abstract

Rational decision making regarding the transport related investment programs greatly depends on the valuation of travel time savings. The primary objective of this study was to estimate the value of travel time savings (VTTS) in the city of Nanjing in China. A stated preference (SP) survey was conducted to investigate travelers’ willingness to pay for travel time savings. Face-to-face interviews were conducted at stations, shopping centers, schools, and parks in different districts in the urban area of Nanjing. Data were divided into two groups according to the respondents’ trip purposes, including one group with business and commute purposes, and one group with leisure purposes. The binary logit model and mixed logit model were developed for each group of data. The results revealed that for both groups of data, the random coefficient binary logit model is superior to the fixed coefficient binary logit model. For the respondents with business and commute purposes, the factors that significantly affect people’s willingness to pay (WTP) for travel time savings include age, income, trip mode, the cost of the recent trip, the reduction in travel time, and the change in travel cost. For the respondents with the leisure purposes, the significant parameters include age, income, trip mode, whether people conduct other activities during their trip, the travel time, cost and distance of the recent trip, the reduction in travel time and the change in travel cost. Based on the random-parameter binary logit model, the estimated value of VTTS for business/commute purposes has a mean of 31.24 RMB/h with a standard error of 18.87 RMB/h. The VTTS for leisure purposes has a mean value of 29.53 RMB/h with a standard error of 21.84 RMB/h.