On the income elasticity of the value of travel time

Transport infrastructure is long-term and in appraisal it is necessary to value travel time savings for future years. This requires knowing how the value of time (VTT) will develop over time as incomes grow. This paper investigates if the cross-sectional income elasticity of the VTT is equal to inter-temporal income elasticity. The study is based on two identical stated choice experiments conducted with a 13 year interval. Results indicate that the relationship between income and the VTT in the cross-section has remained unchanged over time. As a consequence, the inter-temporal income elasticity of the VTT can be predicted based on cross-sectional income elasticity. However, the income elasticity of the VTT is not a constant but increases with income. For this reason, the average income elasticity of the VTT in the cross-sections has increased between the two survey years and can be expected to increase further over time.

► We analyze two identical SP experiments on value of travel time (VTT) 13 years apart. ► The cross-sectional and inter-temporal income elasticity of the VTT is found equal. ► It is thus sufficient to use income elasticities from cross-sections in forecasts. ► The income elasticity of the VTT is not uniform but increases with income. ► The average income elasticity of the VTT seems to increase over time.