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The value of time and external benefits in bicycle appraisal

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Author Info

  • Börjesson, Maria

    (KTH, Royal Institute of Technology)

  • Eliasson, Jonas

    ()
    (KTH, Royal Institute of Technology)

Abstract

We estimate the value of time savings, different cycling environments and additional benefits in cost-benefit analysis of cycling investments. Cyclists’ value of travel time savings turns out to be high, considerably higher than the value of time savings on alternative modes. Cyclists also value other improvements highly, such as separated bicycle lanes. As to additional benefits of cycling improvements in the form of health and reduced car traffic, our results do not support the notion that these will be a significant part in a cost-benefit analysis. Bicyclists seem to take health largely into account when making their travel choices, implying that it would be double-counting to add total health benefits to the analysis once the consumer surplus has been correctly calculated. As to reductions in car traffic, our results indicate that the cross-elasticity between car and cycle is low, and hence benefits from traffic reductions will be small. However, the valuations of improved cycling speeds and comfort are so high that it seems likely that improvements for cyclists are cost-effective compared to many other types of investments, without having to invoke second-order, indirect effects. In other words, our results suggest that bicycle should be viewed as a competitive mode of travel and not primarily as a means to achieve improved health or reduced car traffic.

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File URL: http://www.transportportal.se/SWoPEc/CTS2011-22.pdf
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Bibliographic Info

Paper provided by CTS - Centre for Transport Studies Stockholm (KTH and VTI) in its series Working papers in Transport Economics with number 2011:22.

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Length: 20 pages
Date of creation: 13 Dec 2011
Date of revision:
Publication status: Published as Börjesson, Maria and Jonas Eliasson, 'The value of time and external benefits in bicycle appraisal' in Transportation Research A, 2012, pages 673-683.
Handle: RePEc:hhs:ctswps:2011_022

Contact details of provider:
Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Web page: http://www.kth.se/abe/om_skolan/organisation/centra/cts

Related research

Keywords: Cost benefit analysis; Value of time; Bicycle;

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References

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  1. Börjesson, Maria & Fosgerau, Mogens & Algers, Staffan, 2012. "Catching the tail: Empirical identification of the distribution of the value of travel time," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 378-391.
  2. Mogens Fosgerau, 2004. "Investigating the distribution of the value of travel time savings," Urban/Regional 0410005, EconWPA, revised 25 Nov 2004.
  3. Börjesson, Maria & Fosgerau, Mogens & Algers, Staffan, 2012. "On the income elasticity of the value of travel time," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 368-377.
  4. Hopkinson, P & Wardman, M, 1996. "Evaluating the demand for new cycle facilities," Transport Policy, Elsevier, vol. 3(4), pages 241-249, October.
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  6. Sergio R. Jara-Diaz & Cristián A. Guevara, 2003. "Behind the Subjective Value of Travel Time Savings," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 37(1), pages 29-46, January.
  7. Ortúzar, Juan de Dios & Iacobelli, Andrés & Valeze, Claudio, 2000. "Estimating demand for a cycle-way network," Transportation Research Part A: Policy and Practice, Elsevier, vol. 34(5), pages 353-373, June.
  8. Ted O'Donoghue & Matthew Rabin, 2003. "Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes," American Economic Review, American Economic Association, vol. 93(2), pages 186-191, May.
  9. Rietveld, Piet & Daniel, Vanessa, 2004. "Determinants of bicycle use: do municipal policies matter?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(7), pages 531-550, August.
  10. Abrantes, Pedro A.L. & Wardman, Mark R., 2011. "Meta-analysis of UK values of travel time: An update," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 1-17, January.
  11. Ted O'Donoghue & Matthew Rabin, 2005. "Optimal Sin Taxes," Levine's Bibliography 784828000000000346, UCLA Department of Economics.
  12. Jonas Eliasson & Mattias Lundberg, 2011. "Do Cost--Benefit Analyses Influence Transport Investment Decisions? Experiences from the Swedish Transport Investment Plan 2010--21," Transport Reviews, Taylor & Francis Journals, vol. 32(1), pages 29-48, April.
  13. Sergio Jara-Díaz, 2003. "On the goods-activities technical relations in the time allocation theory," Transportation, Springer, vol. 30(3), pages 245-260, August.
  14. Evans, Alan W, 1972. "On the Theory of the Valuation and Allocation of Time," Scottish Journal of Political Economy, Scottish Economic Society, vol. 19(1), pages 1-17, February.
  15. DeSerpa, A C, 1971. "A Theory of the Economics of Time," Economic Journal, Royal Economic Society, vol. 81(324), pages 828-46, December.
  16. Sælensminde, Kjartan, 2004. "Cost-benefit analyses of walking and cycling track networks taking into account insecurity, health effects and external costs of motorized traffic," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(8), pages 593-606, October.
  17. Börjesson, Maria & Eliasson, Jonas, 2012. "Experiences from the Swedish Value of Time study," Working papers in Transport Economics 2012:8, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The value of time and external benefits in bicycle appraisal
    by CostBenefit in Environmental Valuation & Cost-Benefit News on 2012-01-01 15:45:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Björklund, Gunilla & Isacsson, Gunnar, 2013. "Forecasting the impact of infrastructure on Swedish commuters’ cycling behaviour," Working papers in Transport Economics 2013:36, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  2. Cheng, Yung-Hsiang & Liu, Kuo-Chu, 2012. "Evaluating bicycle-transit users’ perceptions of intermodal inconvenience," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1690-1706.
  3. Björklund, Gunilla & Mortazavi , Reza, 2013. "Influences of infrastructure and attitudes to health on value of travel time savings in bicycle journeys," Working papers in Transport Economics 2013:35, CTS - Centre for Transport Studies Stockholm (KTH and VTI).

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