Investigation of Whether Value of Travel Time Increases as Travel Time Increases

Abstract

This paper analyzes the variation in the value of travel time savings (VTTS) over travel time by applying the method of empirical discrete choice analysis with nonlinear utility functions. First, it formulates the time allocation model and derives VTTS from the model. The theoretical consideration shows that it is impossible to identify the conditions determining the monotonic change in VTTS over travel time. The paper then examines the variation in VTTS over travel time by using empirical data on choices of interurban travel modes in Japan. The empirical analysis assumes constant marginal utility with respect to income for the first case using the model with a nonlinear utility function and assumes nonconstant marginal utility for the second case using the model with a nonlinear utility function. The first case analysis shows that VTTS decreases as travel time increases. The second case shows that variations in the estimated VTTS over travel time appear to be neutral in the case of rail and airplane users, whereas the estimated VTTS appears to decrease as travel time increases in the case of automobile users. If it is acknowledged that VTTS decreases as travel time increases, the marginal benefit arising from the marginal travel time savings would increase as travel time declines, which implies that society will require additional travel time savings as travel time decreases.