Is the intertemporal income elasticity of the value of travel time unity?
The purpose of this study is to estimate the intertemporal income elasticity of the value of travel time (VTT) and test whether it differs from one. The empirical analysis is performed on Swedish revealed preference data, where voluntary job changers' individual wage premium for commuting time changes is used as an estimate of VTT. The panel structure of the data implies the opportunity to use a lagged net income variable on individual level to estimate the income elasticity in an intertemporal way. The result does not support an intertemporal income elasticity of VTT that is different from one and this result is robust over several different empirical specifications. Hence, the policy implication of this study is in contrast to a recent recommendation by an EU-financed project, Heatco, which propose an intertemporal income elasticity of 0.7.
|Date of creation:||28 Apr 2008|
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- Mogens Fosgerau, 2005. "Unit income elasticity of the value of travel time savings," Urban/Regional 0508007, EconWPA.
- Fosgerau, Mogens, 2006.
"Investigating the distribution of the value of travel time savings,"
Transportation Research Part B: Methodological,
Elsevier, vol. 40(8), pages 688-707, September.
- Mogens Fosgerau, 2004. "Investigating the distribution of the value of travel time savings," Urban/Regional 0411006, EconWPA.
- Mogens Fosgerau, 2004. "Investigating the distribution of the value of travel time savings," Urban/Regional 0410005, EconWPA, revised 25 Nov 2004.
- Isacsson, Gunnar & Swärdh, Jan-Erik, 2007. "An empirical on-the-job search model with preferences for relative earnings: How high is the value of commuting time?," Working Papers 2007:12, Swedish National Road & Transport Research Institute (VTI).
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