Marginal valuations of travel time and scheduling, and the reliability premium

Previous works have established synonymity between the notions of uncertainty and unreliability, exploiting this in deriving marginal valuations of travel time and scheduling under uncertainty. Whilst valid for forecasting demand, such valuations fail to illuminate the costs of bearing unreliability – herein referred to as the ‘reliability premium’. The paper derives marginal valuations of travel time and scheduling at the certainty equivalent, showing these to diverge from those under uncertainty. That divergence, which represents the marginal valuation of reliability, raises the possibility of bias should the costs of unreliability not be included in appraisal.