2006•Unpublished venueRequires access

NONLINEARITY OF THE UTLITY FUNCTION AND THE VALUE OF TRAVEL TIME SAVINGS: EMPIRICAL ANAYLSIS OF INTERREGIONAL TRAVEL MODE CHOICE OF JAPAN

Hironori Kato

Abstract

The willingness to pay (WTP) for travel time saving is termed as the value of travel time saving (VTTS). It is widely used in the economic evaluation of transport investment. Although a constant VTTS is often used in practical transport planning, the constancy of VTTS is derived simply from the assumption of a linear utility function. When using a nonlinear utility function, we can derive a nonconstant VTTS with respect to travel time. Many researches have been conducted on the variation in the value of time over travel time or over trip distance. Wardman (1998, 2001, 2004) reviews past British evidence on the value of time and indicates that the value of travel time is expected to increase as trip distance increases. De Lapparent

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Key concepts: Value of time, Travel time, Econometrics, Value (mathematics), Economics, Function (biology), Investment (military), Mode (computer interface)