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Presentation by Guoqing Zhang & James Laird at the Scottish Transport Applications & Research (STAR) Conference 2014. www.starconference.org.uk www.its.leeds.ac.uk/people/j.laird
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Institute for Transport StudiesFACULTY OF ENVIRONMENT
Is the equity value of time really fair?
STAR Conference, Glasgow, 2014
Guoqing Zhang
James Laird
Structure
• Part 1: Motivation
• Part 2: Research objectives
• Part 3:Methodology
• Part 4: Synthetic analysis
• Part 5: Scottish case studies
• Part 6: Conclusions
Motivation
• A key element of benefit from transport infrastructure improvements is travel time savings
• The value travellers attribute to travel time savings is dependent on a number of variables – but principally income and distance
• Equity values of VTTS are used in the Cost Benefit Analysis (CBA) as they are regarded as fair – preventing investment concentrating in high income areas– But equity VoT may lead to a distortion in investment
– Money might be invested in a high cost scheme when people would prefer a low cost
Research objectives
• What is the economic impact of using ‘local’ value of time savings in appraisal?
• What is the implied distributional weights from using a equity VoT?
- Are such weights appropriate?
- Do they vary by scheme?
• What are the challenges associated with using local VoT in an appraisal?
Methodology --- a two stage method
• Stage 1: Synthetic analysis
- Deriving household income
- Deriving trip length
- Deriving VTTS values per trip
- Calculating the user benefit
- Estimating distributional weights
• Stage 2: Scottish case studies
- Deriving household income
- Use demand, trip distance, journey times from Transport Scotland
- Deriving VTTS values per trip
- Calculating the user benefit
- Estimating distributional weights
Synthetic analysis
Equation used to update the VoTs into 2010 prices
VoTs for commuting purpose in 2010 price
VoTs for other non-work purpose in 2010 price
Synthetic analysis
Non-work VTTS lookup table
Synthetic analysis --- Household income fitting
• Seven areas• Distributions fitted to income data from Family Resources
Survey• E.g. Scotland
Synthetic analysis
Scenario1: Fixed trip distance of 10 miles with non-work journey purpose, and every household only produces one trip enjoying 10 minutes’ reduction (10,000 households )
Scenario 2: trip distance varying with non-work journey purpose and 10 minutes’ saving per trip for each household (10,000 households )
Case studies
Analysis of Scheme 1
Analysis of Scheme 2
Case studies
Distributional Weights for scheme1
Distributional Weights for scheme2
Conclusions
• There is a spatial bias with the equity value of time, towards urban schemes
• Distance effects are more important than income effects– User benefits of one of the case studies increased by 24%;
– User benefits of the second scheme went from negative to positive.
• Implied distributional weights of the equity value of time vary– Introduces an inconsistency
• Further research– Expansion of analysis to more trip purposes and schemes;
– Uncertainty in estimating income. Explore using GIS data (e.g. census data).
Thank you for your attention.
Any questions?