Theory and a Case Study of the Option Value of a Transport Service

－ Evaluation of the option value of a local bus service －

Abstract

We review the 'option value' of transport services that has little been evaluated, and put it in the transport economics content. We try to evaluate the 'option value' of a local regular bus service in Ajigasawa Town in Aomori Prefecture, north part of Japan. This service is under risk of close and supported by the community residents through buying multiple tickets of 2,000-yen par month. We find an annual option value around 10,000-yen par household. This amount is not so big, but it means a few free ride e.g. the voluntary mechanism being well functioned.