IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/14666.html
   My bibliography  Save this paper

The Value of Time: Evidence From Auctioned Cab Rides

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP14666
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephan Heblich & Stephen J Redding & Daniel M Sturm, 2020. "The Making of the Modern Metropolis: Evidence from London," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2059-2133.
    2. Gregory Lewis & Patrick Bajari, 2011. "Procurement Contracting With Time Incentives: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1173-1211.
    3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    4. Vincent P. Crawford & Juanjuan Meng, 2011. "New York City Cab Drivers' Labor Supply Revisited: Reference-Dependent Preferences with Rational-Expectations Targets for Hours and Income," American Economic Review, American Economic Association, vol. 101(5), pages 1912-1932, August.
    5. Waldfogel, Joel, 1995. "The Selection Hypothesis and the Relationship between Trial and Plaintiff Victory," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 229-260, April.
    6. Nicholas Bloom & James Liang & John Roberts & Zhichun Jenny Ying, 2015. "Does Working from Home Work? Evidence from a Chinese Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 165-218.
    7. Gilles Duranton & Matthew A. Turner, 2011. "The Fundamental Law of Road Congestion: Evidence from US Cities," American Economic Review, American Economic Association, vol. 101(6), pages 2616-2652, October.
    8. Treb Allen & Costas Arkolakis, 2022. "The Welfare Effects of Transportation Infrastructure Improvements," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 2911-2957.
    9. Alexandre Mas & Amanda Pallais, 2017. "Valuing Alternative Work Arrangements," American Economic Review, American Economic Association, vol. 107(12), pages 3722-3759, December.
    10. Thibaut Lamadon & Elena Manresa & Stephane Bonhomme, 2016. "Discretizing Unobserved Heterogeneity," 2016 Meeting Papers 1536, Society for Economic Dynamics.
    11. Mark Aguiar & Erik Hurst, 2007. "Life-Cycle Prices and Production," American Economic Review, American Economic Association, vol. 97(5), pages 1533-1559, December.
    12. Pablo D. Fajgelbaum & Edouard Schaal, 2020. "Optimal Transport Networks in Spatial Equilibrium," Econometrica, Econometric Society, vol. 88(4), pages 1411-1452, July.
    13. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
    14. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, May.
    15. repec:cdl:uctcwp:qt0rm449sx is not listed on IDEAS
    16. Hall, Jonathan D., 2018. "Pareto improvements from Lexus Lanes: The effects of pricing a portion of the lanes on congested highways," Journal of Public Economics, Elsevier, vol. 158(C), pages 113-125.
    17. 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.
    18. 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.
    19. Antonio Bento & Kevin Roth & Andrew Waxman, 2024. "The Value of Urgency: Evidence from Real-Time Congestion Pricing," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 2(4), pages 786-851.
    20. Henry S. Farber, 2008. "Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers," American Economic Review, American Economic Association, vol. 98(3), pages 1069-1082, June.
    21. Cirillo, C. & Axhausen, K.W., 2006. "Evidence on the distribution of values of travel time savings from a six-week diary," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(5), pages 444-457, June.
    22. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    23. Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-479, June.
    24. Jara-Díaz, Sergio R. & Munizaga, Marcela A. & Greeven, Paulina & Guerra, Reinaldo & Axhausen, Kay, 2008. "Estimating the value of leisure from a time allocation model," Transportation Research Part B: Methodological, Elsevier, vol. 42(10), pages 946-957, December.
    25. Henry S. Farber, 2005. "Is Tomorrow Another Day? The Labor Supply of New York City Cabdrivers," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 46-82, February.
    26. Raj Chetty & John N. Friedman & Nathaniel Hendren & Maggie R. Jones & Sonya R. Porter, 2018. "The Opportunity Atlas: Mapping the Childhood Roots of Social Mobility," NBER Working Papers 25147, National Bureau of Economic Research, Inc.
    27. repec:cdl:ucsdec:qt94w5n6j9 is not listed on IDEAS
    28. Small, Kenneth A., 2012. "Valuation of travel time," Economics of Transportation, Elsevier, vol. 1(1), pages 2-14.
    29. Peter Cohen & Robert Hahn & Jonathan Hall & Steven Levitt & Robert Metcalfe, 2016. "Using Big Data to Estimate Consumer Surplus: The Case of Uber," NBER Working Papers 22627, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Nicholas Buchholz & Laura Doval & Jakub Kastl & Filip Matejka & Tobias Salz, 2025. "Personalized Pricing and the Value of Time: Evidence From Auctioned Cab Rides," Econometrica, Econometric Society, vol. 93(3), pages 929-958, May.
    3. Durrmeyer, Isis & Martinez, Nicolas, 2022. "The Welfare Consequences of Urban Traffic Regulations," TSE Working Papers 22-1378, Toulouse School of Economics (TSE), revised Dec 2024.
    4. 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).
    5. 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.
    6. Small, Kenneth A., 2012. "Valuation of travel time," Economics of Transportation, Elsevier, vol. 1(1), pages 2-14.
    7. Mosquera, Roberto, 2024. "Stuck in traffic: Measuring congestion externalities with negative supply shocks," Regional Science and Urban Economics, Elsevier, vol. 108(C).
    8. Boffa, Federico & Fedele, Alessandro & Iozzi, Alberto, 2023. "Congestion and incentives in the age of driverless fleets," Journal of Urban Economics, Elsevier, vol. 137(C).
    9. Peer, Stefanie & Knockaert, Jasper & Koster, Paul & Verhoef, Erik T., 2014. "Over-reporting vs. overreacting: Commuters’ perceptions of travel times," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 476-494.
    10. Herzog, Ian, 2024. "The city-wide effects of tolling downtown drivers: Evidence from London’s congestion charge," Journal of Urban Economics, Elsevier, vol. 144(C).
    11. Soriguera, Francesc, 2014. "On the value of highway travel time information systems," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 294-310.
    12. Borck, Rainald & Mulder, Peter, 2024. "Energy policies and pollution in two developing country cities: A quantitative model," Journal of Development Economics, Elsevier, vol. 171(C).
    13. Redding, Stephen, 2020. "Trade and Geography," CEPR Discussion Papers 15268, C.E.P.R. Discussion Papers.
    14. Beaudoin, Justin & Lin Lawell, C.-Y. Cynthia, 2018. "The effects of public transit supply on the demand for automobile travel," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 447-467.
    15. Hirte, Georg & Laes, Renée & Gerike, Regine, 2023. "Working from self-driving cars," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    16. Gorjian, Mahshid, 2025. "Statistical and Methodological Advances in Spatial Economics: A Comprehensive Review of Models, Empirical Strategies, and Policy Evaluation," MPRA Paper 125636, University Library of Munich, Germany.
    17. Yiyuan Ma & Ke Chen & Youzhi Xiao & Rong Fan, 2022. "Does Online Ride-Hailing Service Improve the Efficiency of Taxi Market? Evidence from Shanghai," Sustainability, MDPI, vol. 14(14), pages 1-16, July.
    18. Borck, Rainald, 2019. "Public transport and urban pollution," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 356-366.
    19. Liu, Peng & Xu, Shu-Xian & Ong, Ghim Ping & Tian, Qiong & Ma, Shoufeng, 2021. "Effect of autonomous vehicles on travel and urban characteristics," Transportation Research Part B: Methodological, Elsevier, vol. 153(C), pages 128-148.
    20. Hirte, Georg & Laes, Renée, 2022. "Working from self-driving cars," CEPIE Working Papers 01/22, Technische Universität Dresden, Center of Public and International Economics (CEPIE).

    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)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:14666. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.