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The value of travel time variance

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  • Fosgerau, Mogens
  • Engelson, Leonid

Abstract

This paper considers the value of travel time variability under scheduling preferences that are de�fined in terms of linearly time-varying utility rates associated with being at the origin and at the destination. The main result is a simple expression for the value of travel time variability that does not depend on the shape of the travel time distribution. The related measure of travel time variability is the variance of travel time. These conclusions apply equally to travellers who can freely choose departure time and to travellers who use a scheduled service with �fixed headway. Depending on parameters, travellers may be risk averse or risk seeking and the value of travel time may increase or decrease in the mean travel time.

Suggested Citation

  • Fosgerau, Mogens & Engelson, Leonid, 2010. "The value of travel time variance," MPRA Paper 42272, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:42272
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    References listed on IDEAS

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    More about this item

    Keywords

    Value of travel time; Value of travel time variability; Reliability; Scheduling preferences;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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