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The Value of Time: Evidence From Auctioned Cab Rides

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  • Kastl, Jakub
  • Buchholz, Nicholas
  • Doval, Laura
  • MatÄ›jka, Filip
  • Salz, Tobias

Abstract

We estimate valuations of time using detailed consumer choice data from a large European ride hail platform, where drivers bid on trips and consumers choose between a set of potential rides with different prices and waiting times. We estimate consumer demand as a function of prices and waiting times. While demand is responsive to both, price elasticities are on average four times higher than waiting-time elasticities. We show how these estimates can be mapped into values of time that vary by place, person, and time of day. Regarding variation within a day, the value of time during non-work hours is 16% lower than during work hours. Regarding the spatial dimension, our value of time measures are highly correlated both with real estate prices and urban GPS travel flows. We apply our measures to quantify the opportunity cost of traffic congestion in Prague, which we estimate at $483,000 per day.

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  • Kastl, Jakub & Buchholz, Nicholas & Doval, Laura & MatÄ›jka, Filip & Salz, Tobias, 2020. "The Value of Time: Evidence From Auctioned Cab Rides," CEPR Discussion Papers 14666, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14666
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    Cited by:

    1. Christensen, Peter & Osman, Adam, 2021. "The Demand for Mobility: Evidence from an Experiment with Uber Riders," IZA Discussion Papers 14179, Institute of Labor Economics (IZA).
    2. Su, Yichen, 2022. "Measuring the Value of Urban Consumption Amenities: A Time-Use Approach," Journal of Urban Economics, Elsevier, vol. 132(C).
    3. Boffa, Federico & Fedele, Alessandro & Iozzi, Alberto, 2023. "Congestion and incentives in the age of driverless fleets," Journal of Urban Economics, Elsevier, vol. 137(C).
    4. Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
    5. Tarduno, Matthew, 2021. "The congestion costs of Uber and Lyft," Journal of Urban Economics, Elsevier, vol. 122(C).
    6. Kastl, Jakub & Buchholz, Nicholas & Doval, Laura & Matějka, Filip & Salz, Tobias, 2020. "The Value of Time: Evidence From Auctioned Cab Rides," CEPR Discussion Papers 14666, C.E.P.R. Discussion Papers.
    7. Krekel, Christian & MacKerron, George, 2023. "Back to Edgeworth? Estimating the Value of Time Using Hedonic Experiences," IZA Discussion Papers 16308, Institute of Labor Economics (IZA).
    8. Bencsik, Panka & Lusher, Lester & Taylor, Rebecca L.C., 2023. "Slow Traffic, Fast Food: The Effects of Time Lost on Food Store Choice," IZA Discussion Papers 16036, Institute of Labor Economics (IZA).
    9. Gilles Duranton & Jessie Handbury, 2023. "COVID and Cities, Thus Far," Economic Policy Review, Federal Reserve Bank of New York, vol. 29(2), pages 6-52, October.
    10. Enache, Andreea & Friberg, Richard & Wiklander, Magnus, 2023. "Demand for in-app purchases in mobile apps—A difference-in-difference approach," International Journal of Industrial Organization, Elsevier, vol. 88(C).
    11. Su, Yichen, 2022. "Measuring the Value of Urban Consumption Amenities: A Time-Use Approach," MPRA Paper 113158, University Library of Munich, Germany.
    12. Wichman, Casey J. & Cunningham, Brandon, 2023. "Notching for free: Do cyclists reveal the opportunity cost of time?," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    13. Jerch, Rhiannon & Barwick, Panle Jia & Li, Shanjun & Wu, Jing, 2024. "The impact of road rationing on housing demand and sorting," Journal of Urban Economics, Elsevier, vol. 140(C).
    14. Ariel Goldszmidt & John A. List & Robert D. Metcalfe & Ian Muir & V. Kerry Smith & Jenny Wang, 2020. "The Value of Time in the United States: Estimates from Nationwide Natural Field Experiments," NBER Working Papers 28208, National Bureau of Economic Research, Inc.
    15. Buchholz, Nicholas & Doval, Laura & Kastl, Jakub & Matejka, Filip & Salz, Tobias, 2020. "The Value of Time: Evidence From Auctioned Cab Rides," CEPR Discussion Papers 14666, C.E.P.R. Discussion Papers.
    16. Zhang, Yuhan & Shao, Yichang & Bi, Hui & Aoyong, Li & Ye, Zhirui, 2023. "Bike-sharing systems rebalancing considering redistribution proportions: A user-based repositioning approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 610(C).
    17. Lam, Chungsang Tom & Liu, Meng & Hui, Xiang, 2021. "The geography of ridesharing: A case study on New York City," Information Economics and Policy, Elsevier, vol. 57(C).
    18. Jackson Dorsey & Ashley Langer & Shaun McRae, 2022. "Fueling Alternatives: Gas Station Choice and the Implications for Electric Charging," NBER Working Papers 29831, National Bureau of Economic Research, Inc.
    19. Durrmeyer, Isis & Martinez, Nicolas, 2022. "The Welfare Consequences of Urban Traffic Regulations," TSE Working Papers 22-1378, Toulouse School of Economics (TSE).

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    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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