HOW DOES THE VALUE OF TRAVEL TIME SAVING VARY OVER THE INDIVIDUAL’S INCOME?

Abstract

This paper analyzes how the value of travel time savings (VTTSs) varies over individual’s income. First, we formulate a time allocation model and examine the variation of VTTS over income with the comparative static analysis. The results show that the variation of VTTS over income depends on whether the marginal utility is increasing or decreasing with respect to the work time. As a shape of utility function cannot be fixed a priori, we cannot know clearly the variation of VTTS over income. Then, we analyze the VTTS over income empirically with the travel data of urban rail in Tokyo. We estimate the multinomial logit model and the mixed logit model for six different income groups. The empirical analysis shows that the VTTS increases as the income increases.