Estimating Income Effects Can represent effects of income on travel - - PowerPoint PPT Presentation

Estimating Income Effects

• Can represent effects of income on travel time and

travel cost utilities in several forms, e.g.:

• 1. Utilities inversely or directly proportional to income:
• 2. Utilities affected by income in elasticity form:

Estimating Distance Effects

• Sensitivity to travel time and cost have been

seen to vary with trip distance

• These effects can be represented as below

Variations in Values of Time

• Data compiled from 22 independent studies conducted in

different geographies; VOT estimated with similar methods

• Overall, VOTs average 56% of wage rate but vary between 25%

and 95% OF INCOME

y = 8E-05x + 4.4368 R2 = 0.2493 $0 $5 $10 $15 $20 $25 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 Average Annual Household Income VOT ($/hr)

Variations in Values of Time (2)

• Values of time also vary by average trip

distance

y = 0.0949x + 7.0722 R2 = 0.0875 $0 $5 $10 $15 $20 $25 20 30 40 50 60 70 80 Average Commute Trip Duration (minutes) VOT ($/hr)

Variations in VOT Over Time

• Average VOTs appear to be increasing at least

with the CPI

1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 2003 2004 2005 2006 2007 2008 Consumer Price Index Wage Rate Value of Time