The income elasticity of the value of travel time savings: A meta-analysis

Abstract

The value of travel time savings (VTTS) is an important concept used in cost-benefit analyses for project appraisals and demand modelling in the transport sector. The relationship between the VTTS and income is particularly important since it underpins how official VTTS recommendations are uplifted over time as incomes grow. The income elasticity of VTTS has been investigated in many empirical studies, exhibiting considerable variation across them. Notably, repeat studies tend to find the lowest implied income effects and meta-analyses the largest income elasticities, with those obtained from cross-sectional inter-personal comparisons somewhere between. This paper aims to explain the VTTS variation in terms of an individual's or household's income level by using the meta-analysis technique. The analysis covers 268 income elasticities of the VTTS extracted from 49 studies conducted from 1968 to 2019 in countries across the globe. The meta-analysis method determines the factors that influence these income elasticity variations. The results of the meta-model highlight that the variation of the income elasticity is explained by several factors, including income levels, the transport mode, personal or household income, inter-temporal or cross-sectional elasticity, journey purpose and year of the survey, shedding light on how the VTTS income elasticity varies across different sources.