Valuation Of Time Research Articles

Rail infrastructure charging EU-directive, Swedish concerns and theory

The first railway package is being recast by the legislative bodies of the European Union. One point of departure in this paper is how Swedish agencies treat issues concerning marginal cost based charges, financing charges and allocation of scarce capacity and it discusses these issues from a welfare point of view, partly by use of theoretical modelling. It is seen here that the Swedish infrastructure manager (the Swedish Transport Administration) so far has no method for calculation of marginal costs as a base for charging, especially for costs of scarce capacity, and that the infrastructure manager is applying or discussing various methods for allocations of scarce track capacity. The EU-recast gives no guidance on principles for calculation of charges for scarce capacity, so we recommend the Swedish Transport Administration to develop such charges. The Administration seems to ignore important externalities that should be taken into consideration from a welfare point of view, with respect both to efficient charging and to allocation of scarce capacity. The analytical modelling part of the paper aims to derive these charges in principle, taking these externalities into account. If financing charges exceeding social marginal costs are applied, the model shows how to minimise the welfare loss of these increases. It also shows that financing charges should primarily be applied to market segments that cause large external costs from the operation of the train, where its customers have low valuation of wait time and delay time, where customers of other segments have high valuations of delay and where increased profits for other operators are induced.

Valuing perceived insecurity associated with use of and access to public transport

This study uses a stated choice experiment and drawings of four different type-environments to assess how various security-promoting factors in the built physical environment influence valuation of walking time when accessing public transport. Valuations that can be applied for evaluating policies to improve perceived security are obtained. Consistent results are achieved, indicating that the method is promising for incorporating aspects in the physical environment in the welfare analysis. The results indicate a systematic variation in value of walk time in different physical environments and it is more dependent of the physical environment for women than for men. This paper thereby contributes to the literature by showing that results by social sciences can be verified using methods and theories traditionally used in transport and welfare analysis and may therefore be incorporated in standard CBA. A contribution of this study is the insight that the perception of insecurity involved in accessing the public transport system is a welfare loss that can be quantified.

The congestion multiplier: Variations in motorists’ valuations of travel time with traffic conditions

The value of travel time savings in part depends upon the disutility of the travel time that is saved and partly on the use to which the time saved is put. It has long been recognised that the disutility of the time spent travelling also depends upon a wide range of factors such as the journey length or the effort, comfort and safety associated with travelling. Hence we might expect the value of motorists’ travel time to vary with the traffic conditions as represented by the degree of congestion, in part to reflect the more difficult driving environment when there are more vehicles, but also a higher sense of frustration, similar to that associated with waiting time and contributing to its premium valuation. In this context, and despite the predominance of car travel in developed countries, the empirical evidence specifically relating to car values of travel time tends to fail to distinguish between different types of time according to the degree of congestion. Thus we are often left unclear as to precisely what type of time has been valued. Moreover, when a distinction is made, it tends to be into a simple dichotomy of congested and uncongested traffic. This paper provides new evidence on the variation in the valuation of motorists’ travel time savings across a finer gradation of types of time than has been hitherto attempted. This is obtained from the same Stated Choice exercise conducted in the United Kingdom and the United States. The paper also provides an extensive account of previous research into how congestion impacts on motorists’ values of time.

MedPAC Ponders SGR Alternatives for Provider Pay

WASHINGTON – Multiple options exist to permanently fix the Medicare Sustainable Growth Rate formula, but each has its cost to practitioners, patients, and the program, according to staff analysts for the Medicare Payment Advisory Commission. Among the options MedPAC staff recently presented to commissioners were adjusting the SGR's spending targets so that they are no longer cumulative and allowing some flexibility. Either option would remove the annual pay cut threat that doctors and others have endured since 2002 under the SGR, according to Cristina Boccuti, a principal policy analyst for MedPAC. However, neither option would leave any room to offer incentives for improved quality and efficiency, she added. In the past, MedPAC has recommended setting target growth rates – and payment rates – according to particular service categories, and the commission is looking in this direction again. For example, separate categories could be established for primary care, imaging, minor procedures, and anesthesia, allowing rates to more closely track volume of services. Two options that seemed to pique commissioners' interest: exempting certain providers (such as accountable care organizations) from the current SGR target but holding them accountable for other targets, and using penalties for physicians who are outliers in terms of resource use. MedPAC currently has two contractors working on projects to better determine the valuation of providers' time and resource use. More information will be available at the next commission meeting, Ms. Boccuti said. Every year since 2002, Medicare has failed to meet the SGR targets, causing physician pay, by law, to be reduced. However, Congress has routinely stepped in to legislate a way to avoid those cuts. C the avoided cuts are becoming a cumulative and growing debt bn the federal ledger. The White House, in its fiscal 2012 budget proposal, is proposing to reduce that debt over the next 10 years, at a cost of $370 billion. But the administration has figured out how to pay for that fix only for the first 2 years. The reality is that there's a declining pool of Medicare-specific offsets – required by law – to pay for fixing the SGR, Glenn Hackbarth, MedPAC chairman, said at the meeting. “We're in a deteriorating situation here; we're spiraling down,” said Mr. Hackbarth. “This isn't going to get better; it's going to get worse.” Mr. Hackbarth said that he envisions a future where lawmakers will have to take money from education or roads or some other nonhealth area of the budget to pay for the Medicare fix. “And that bothers me,” he said. The SGR-based uncertainty facing practitioners is undermining their confidence in Medicare and leading some to stop seeing beneficiaries, Mr. Hackbarth noted. He said that the time might be right to work out a “quid pro quo” with practitioners: an end to the yearly exercise to avert the SGR cuts in exchange for a payment system that has volume constraints and rewards efficiency and improved quality, or, alternatively penalizes those who fail to meet such targets. Alicia Ault is an associate editor with Elsevier Global Medical News.

Long-Run vs. Short-Run Perspectives on Consumer Scheduling: Evidence from a Revealed-Preference Experiment Among Peak-Hour Road Commuters

Theoretical and empirical studies of consumer scheduling behavior in commuting, and the associated valuation of time and schedule delays usually ignore that consumers have more exibility to adjust their schedule in the longer run than in the shorter run, implying that also these valuations may differ. We propose a framework that does distinguish between a long-run choice of routines over the day, based on longrun expectations of travel times, and a short-run choice of departure time, taking these routines as given and using more precise expectations of travel time that can be formed when getting closer to the moment of traveling. Our empirical results show that significant differences exist in the valuation of time and of schedule delays between the long-run and the short-run model. Travel time is valued higher in the long-run model, as changes in travel time are more permanent and can therefore be exploited better through the rescheduling of routines. Schedule delays are valued higher in the short-run model, since scheduling restrictions are typically more binding in the short-run.

The Influence of Cultural Activity Types on Buyer-Seller Negotiations: A Game Theoretical Framework for Intercultural Negotiations

AbstractThis article uses an intercultural bargaining framework to analyze cooperation and conflict between buyers and sellers in intercultural negotiations. On the basis of game theoretical reasoning, culturally embedded bargaining patterns are transformed into culturally determined strategies in intercultural negotiations. The cultural differences of the players can be seen in the initial offer, the strategic approach, the valuation of time, the frequency of rejection and the objectives of the negotiation. In order to provide prescriptions for cross-cultural bargaining, the clash of cultures is dealt with in nine scenarios to show potential conflicts and cooperation between the players.

Morning commute problem considering route choice, user heterogeneity and alternative system optima

This paper extends the bottleneck model to study congestion behavior of morning commute and its implications to transportation economics. The proposed model considers simultaneous route and departure time choices of heterogenous users who are distinguished by their valuation of travel time and punctual arrival. Moreover, two dynamic system optima are considered: one minimizes system cost in the unit of monetary value (i.e., the conventional system optimum, or SO) and the other minimizes system cost in the unit of travel time (i.e., the time-based SO, or TSO). Analytical solutions of no-toll equilibrium, SO and TSO are provided and the welfare effects of the corresponding dynamic congestion pricing options are examined, with and without route choice. The analyses suggest that TSO provides a Pareto-improving solution to the social inequity issue associated with SO. Although a TSO toll is generally discriminatory, anonymous TSO tolls do exist under certain circumstances. Unlike in the case with homogenous users, an SO toll generally alters users’ route choices by tolling the poorer users off the more desirable road, which worsens social inequity. Numerical examples are presented to verify analytical results.

Modeling freight transportation preferences: Conjoint analysis for Turkish Region

Conjoint analysis is a very popular method used to analyze the structure of consumers’ preference. This technique is usually based on stated preference technique. Stated preferences experiments present individuals with hypothetical travel scenarios and seek their preferences. This paper reports the results of a conjoint analysis experiment performed in two Turkish Regions that estimates transportation managers’ preferences for freight service attributes. According to results of analysis, the possibility that firms rely on intermodal transportation rather than on road transportation is evaluated. The research project focused on freight transportation demand by cement firms in the Antalya Region, Turkey. In the analysis, data related with the cement transported from City of EskiAŸehir to the City of Antalya and its surrounding area by road and intermodal transportation modes were used. These data were obtained in a survey conducted in 2007 with 50 cement merchants in Antalya. The empirical results show that time reliability is an important variable determining mode choice. Valuation of cost and time are generally lower than expected. Key words: Stated preference, conjoint analysis, intermodal transportation, modal choice.

Sign-dependent Value of Time in Stated Preference: Judgment Bias or Exposure of Genuine Preference?

Stated choice surveys may be the most common approach to obtain monetary values of travel time. The large surveys of 1988 and 1997 in the Netherlands and of 1994 in the United Kingdom produced some puzzling outcomes, such as differences in monetary valuation between travel time gains and losses. This has given rise to controversies about the behaviour that might have caused this ‘sign effect’, which are not decisively settled. This paper shows that Prospect Theory and the heuristic judgment concept as developed in behavioural sciences can shed more light on these controversies2. It starts with an introduction of some basic principles of these lines of work before re-examining the Dutch and UK surveys from these points of view. It is concluded that the sign effect is not caused by biases that stem from heuristic judgment but follows from lossaversive valuation of time and money attributes as assumed in Prospect Theory.

Stated Preference Approach for Valuation of Travel Time Displayed as Traffic Information on a VMS Board

A stated preference (SP) approach is explored for valuation of travel time displayed as traffic information on a variable message sign (VMS) board. Two types of traffic information (called as TI-I and TI-II) are investigated and the valuation is carried out separately for private car and taxi users. Instantaneous travel time is considered as traffic information in TI-I, while instantaneous travel time along with its variation level is considered as traffic information in TI-II. The SP (choice based) data are analyzed by multinomial logit and random parameter logit (RPL) models. In RPL models, the random parameters are assumed to follow constrained triangular distribution, where mean equals its spread. The decomposition of preference heterogeneity around the mean of random parameter is also investigated in RPL models. A variation is observed in the values of travel time under TI-I and TI-II, highlighting the role of the content of VMS based travel-time information. Both travel time as traffic information a...

Modeling the Public Health System Response to a Terrorist Event in the Food Supply

We have developed a simulation model to quantify and characterize the response of the public health system and the impact of public health advisories in the event of an intentional contamination of the food supply. The model has three components: (1) definition of individual exposure over time and the outcomes of exposure, (2) definition of the geographical dispersal of exposures, and (3) response of the public health authorities to symptomatic individuals. The model explicitly considers the variation in the multiple interrelated facets of the response system, including differences among individuals' responses to exposure, variation between health care providers, and the subsequent processing of samples and confirmation of cases. To illustrate use of the model, case studies with Escherichia coli O157:H7 and Salmonella spp. in three categories of food vehicle were compared. The level of detail required to run the public health component of the model is not trivial. While some data may not be available for hazards of particular interest in potential bioterrorism events, the application of expert judgment permits comparisons between different agents, different system reactions, and other assumptions within the system. The model provides the capacity to study the impact of system changes, to compare scenarios and to quantify the benefits of improvement in terms of averted exposures and risk reduction, and constitutes a significant aid to understanding and managing these threats. Essentially, the model provides an explicit valuation of time saved in the identification and intervention in terrorist events in the food supply.

Valuation of travel time and departure time choice in the presence of time-of-day pricing

This paper evaluates the efficiency of New Jersey Turnpike (NJTPK) time-of-day pricing program via derivation of value of travel time (VOTT) from an analytical approach. The proposed model extends classical time allocation models while considering departure/arrival time choices and relaxes the constant marginal utility assumption to derive an analytical model for VOTT as well as to investigate the theoretical relationship between VOTT, departure/arrival time choice, income, and travel time. Using the traveler survey data collected to evaluate the NJTPK time-of-day pricing program, VOTT functions are estimated for different departure time choices and for trip purposes. The main contribution of the empirical results presented in this study is that in the presence of time-of-day pricing applications, when the main choice of commuters is departure time rather than alternative routes and/or modes, VOTT is influenced from the departure time, trip purpose, desired arrival time, and deviation from the desired arrival time in addition to the travel time, toll, and income parameters. Mean VOTT values are found to range between $15 per hour and $20 h −1, depending on departure time choice and trip purpose. This result indicates relatively high VOTT values, explaining the low level of response to the minor toll differentials introduced by the NJTPK Authority.

Dynamic Shortest-Path Algorithm for Continuous Arc Travel Times

To achieve the desired computational speed, existing algorithms for time-dependent (or dynamic) shortest-path problems call for the unrealistic aggregation of travel time as multiples of a given time increment. While the time increment can be varied between, say, peak and off-peak periods, it still has its obvious limitation on granularity. An improved solution algorithm is proposed for the all-to-one or one-to-all time-dependent versions of the problem. The algorithms are solidly founded on Bellman's principle of optimality and apply to continuous or real-value arc travel times (rather than the current practice of discrete-time specifications). The new algorithms are practical in computational speed, and they capture a more realistic metric for route choice. In this case, a relatively coarse time increment can be used throughout the analysis, yet it is compatible with any continuous or real-value arc travel times. To support these claims, computational results that consider various network sizes, densities, and numbers of time increments are provided. For future extensions, a non-first-in-first-out fastest-path and minimum-cost-path algorithm is proposed. A generalized cost (or disutility arc function) is defined to combine the two, on the basis of which route choices are made. For route-choice decisions, it is stipulated that adoption of such a disutility specification mandates a continuous valuation of arc time and cost. Instead of an all-to-one implementation, a one-to-all implementation is suggested under these circumstances. The latter approach, when complemented by the speed of algorithmic execution, facilitates real-world applications. It allows the driver to value incident delay and risks in route choice on a real-time basis.

Time Valuation as an Alternative to Lost Enjoyment of Life in Determining Wrongful Death Damages

In a wrongful death case1 the task of the jury, if liability is found, is to award those pecuniary and non-pecuniary damages to the decedent’s survivor(s) that would make them whole. Steven Shavell (2004) defines pecuniary and non-pecuniary losses as follows: Pecuniary losses are those that either are monetary or are losses of goods that can be purchased in markets, in which case the measure of the losses comprises the replacement costs. Non-pecuniary losses correspond to the losses in utility suffered when irreplaceable things have been destroyed, such as family portraits or other unique objects. Making the survivors of a decedent whole, of course, is impossible and, in practice, testimony by a forensic economist on wrongful death damages is usually limited to calculations of lost earnings support and household work services the decedent could have provided survivors. There are other compensable pecuniary damages suffered by survivors of a decedent such as the advice, counsel, instruction, supervision, and care a decedent may have provided survivors for which a replacement cost might be calculated. Finally there are the usual non-pecuniary losses of pure companionship, consortia, love, affection, the loss of the enjoyment of the decedent’s life and bereavement suffered by survivors which are usually categorized as intangibles and left to a jury to decide or are prescribed by statute. The fundamental difference between pecuniary and non-pecuniary damages is that pecuniary damages are associated with a productive use of time (such as work, offering advice and counsel, or giving care, support, or assistance) while non-pecuniary damages derive from the pure utility of relationships alone. Schwartz and Thornton (1989) suggest that economists should approach damages from a utility base which would incorporate both the tangible (pecuniary) and intangible (non-pecuniary) losses suffered by survivors of a decedent. Such a holistic approach to damages is beyond the capacity of traditional means of calculating wrongful death damages by economists. A number of states, over the past two decades, have attempted to

Time as a Trade Barrier

A large and growing share of world trade travels by air. We model exporters' choice between fast, expensive air cargo and slow, cheap ocean cargo, which depends on the price elasticity of demand and the value that consumers attach to fast delivery. We use US imports data that provide rich variation in the premium paid for air shipping and in time lags for ocean transit to extract consumers' valuation of time. We estimate that each day in transit is equivalent to an advalorem tariff of 0.6 to 2.1 percent. The most time-sensitive trade flows involve parts and components trade. (JEL F13, F14, L93)

Return policies, market outcomes, and consumer welfare

Abstract. The effect of return policies on market outcomes is studied in a model where consumers differ in their valuations of time. Product reliability is identified with defect rates. Producers first choose reliability levels and then compete in prices. For given defect rates, allowing returns makes products closer substitutes, enhancing competition and reducing prices. Being closer substitutes makes higher reliability less worthwhile, which reduces reliability. While the decrease in reliability reduces consumer welfare, the decrease in prices raises it. The latter dominates, so that aggregate consumer welfare increases with return policy.

Multitasking and Value of Travel Time Savings

This paper investigates the relationship between multitasking during travel and the valuation of travel time (VOT). By building on the literature on travel time valuation and multitasking, both the attitude toward multitasking and actual multitasking behavior are hypothesized to have a potential impact on the VOT. The basic assumption is that if travel time can be used for other purposes or if it becomes more enjoyable as it is increasingly accommodated by information and communication technology tools, travel time is valued less negatively, and the VOT will be lower. To test these hypotheses, a stated preference survey was carried out among commuters in the Dutch Eindhoven region. With estimated discrete choice models, the analyses indicate that monochronic individuals, who dislike engaging in activities simultaneously, have a higher VOT, as one would expect. Commuters who listen to music while commuting have a lower VOT. Commuters who read for their work while commuting have a higher VOT, probably related to a more task-oriented attitude. Overall, the findings suggest that actual multitasking behavior and attitudes toward multitasking have a significant impact on the VOT and cannot be neglected in policy analyses.

Marginal valuations of travel time and scheduling, and the reliability premium

Previous works have established synonymity between the notions of uncertainty and unreliability, exploiting this in deriving marginal valuations of travel time and scheduling under uncertainty. Whilst valid for forecasting demand, such valuations fail to illuminate the costs of bearing unreliability – herein referred to as the ‘reliability premium’. The paper derives marginal valuations of travel time and scheduling at the certainty equivalent, showing these to diverge from those under uncertainty. That divergence, which represents the marginal valuation of reliability, raises the possibility of bias should the costs of unreliability not be included in appraisal.

Sharing the burden of TB/HIV? Costs and financing of public–private partnerships for tuberculosis treatment in South Africa

To explore the economic costs and sources of financing for different public-private partnership (PPP) arrangements to tuberculosis (TB) provision involving both workplace and non-profit private providers in South Africa. The financing required for the different models from the perspective of the provincial TB programme, provider, and the patient are considered. Two models of TB provider partnerships were evaluated, relative to sole public provision: public-private workplace (PWP) and public-private non-government (PNP). The cost analysis was undertaken from a societal perspective. Costs were collected retrospectively to consider both the financial and economic costs. Patient costs were estimated using a retrospective structured patient interview. Expansion of PPPs could potentially lead to reduced government sector financing requirements for new patients: government financing would require $609-690 per new patient treated in the purely public model, in contrast to PNP sites which would only need to $130-139 per patient and $36-46 with the PWP model. Moreover, there are no patient costs associated with the treatment in the employer-based facilities and the cost to the patient supervised in the community is, on average, three times lower than in public sector facilities. The results suggest that there is a strong economic case for expanding PPP involvement in TB treatment in the process of scaling up. The cost to the government per new patient treated could be reduced by enhanced partnership between the private and public sectors.

IMAGING VALUATION MODELS IN HUMAN CHOICE

To make a decision, a system must assign value to each of its available choices. In the human brain, one approach to studying valuation has used rewarding stimuli to map out brain responses by varying the dimension or importance of the rewards. However, theoretical models have taught us that value computations are complex, and so reward probes alone can give only partial information about neural responses related to valuation. In recent years, computationally principled models of value learning have been used in conjunction with noninvasive neuroimaging to tease out neural valuation responses related to reward-learning and decision-making. We restrict our review to the role of these models in a new generation of experiments that seeks to build on a now-large body of diverse reward-related brain responses. We show that the models and the measurements based on them point the way forward in two important directions: the valuation of time and the valuation of fictive experience.