Valuation of travel time reliability: Considering the traveler's adaptive expectation with an indifference band on daily trip duration

In this article, we focus on the valuation of travel time reliability that considers the adaptive expectation with an indifference band on daily trip duration. Owing to the learning effect of adaptive expectation, travel time variation relates to the travel time forecast bias but not to the absolute deviation of daily trip duration. Meanwhile, the indifference band toward travel time variation moderates the adaptive expectation formation in daily trip repetition. In this case, travel time reliability follows the discrete probability distribution. We use the rank-dependent utility framework to capture the value of travel time reliability (VOR), in which the probability transformation accommodates the risk attitude toward random trip duration and provides us the subjective probability weight to each potential reliability point. Numerical simulation indicates that the traveler's subjective VOR awareness associates with both learning rate and indifference band in the adaptive expectation on daily trip duration. We also set forth some policy and practice implications of this research in the traffic assignment and network formulation.