How much do you value the time you spend traveling? How much would you be willing to pay extra for a ticket if the journey took just one hour less? Bára Karlínová, a graduate of ECON MUNI’s PhD programme, tackled similar questions in her doctoral research. She won the Dean's Award in October for her thesis, which explored the value of travel time.
What exactly is the value of travel time?
The value of travel time refers to the monetary value placed on time spent traveling. In essence, it is the price people are willing to pay to reduce their travel time by, say, one hour. This figure is important for developing transport models and evaluating transport projects.
What does it tell us about how people travel?
Today, there is a general drive to reduce travel times by improving transport networks - for example, by introducing more efficient connections or faster modes of transport. Reducing travel time allows people to spend the time saved in more productive or enjoyable ways. The value of travel time is therefore a way of expressing the monetary benefits of these time savings, allowing us to compare whether the benefits of a particular transport investment outweigh its monetary costs.
Which transport modes have you studied?
In my thesis I presented three studies. The first focused on the value of travel time in European passenger air transport. What makes this study unique is that the data captures the actual behaviour of passengers who have booked their flight through Kiwi.com. This allowed me to estimate the value of time spent on the plane, the value of the transfer and the value of the transfer time.
In the second study, I looked at the value of long-distance rail travel time. I worked with data capturing the hypothetical behaviour of respondents travelling on the two main railway lines in the Czech Republic. In the third study, my colleagues and I used a laboratory experiment to investigate the hypothetical biases in the value of travel time. We compared the value of unexpected waiting or delay based on respondents' hypothetical and actual behaviour.
How much do people value their time when they travel?
For air travel, for example, I identified three values of travel time. I estimated the value of the time spent on the plane at €19/hour in 2020 and €17.5/hour in 2021. The value of a transfer was €15.5/transfer in 2020 and €24.5/transfer in 2021. The difference between the two years is probably due to the pandemic, as more people travelled in 2021 than in 2020, but were still subject to various restrictions. These restrictions varied considerably from country to country, which may have led passengers to book more expensive flights with fewer tranfers. I estimated the value of the transfer time at €9/h in 2020 and €10/h in 2021.
What do these findings mean in practice?
Previous international studies estimating the value of air travel time have typically provided a value for the entire journey. However, they did not take into account the differences between different parts of the journey, which can be more or less unpleasant for passengers. Data from Kiwi.com showed that travel time values varied significantly between journey legs. This data will provide businesses and decision makers with more accurate information on the benefits of transport investment.
However, it is important to note that I have analysed data from the pandemic period and therefore my results may not reflect the situation before or after the pandemic. In addition, Kiwi.com users represent a specific sample because it focuses on low-cost carriers. Therefore, my conclusions may not apply to all European air travellers.
What are the key findings of the study focusing on rail travel?
In the evaluation of transport projects in the Czech Republic, values from studies in neighbouring countries were used because data for the Czech Republic were not available. However, the value of travel time estimated in my research was significantly lower than these assumed values. This result suggests that we should use values from other national studies with caution.
In the third study, you and your colleagues looked at the value of waiting time and unexpected delays. What did you find?
In the last study, we found a significant hypothetical bias. In other words, the value based on the responses of the research participants who made hypothetical decisions was about thirty percent lower than the value when the participants in the experiment made real decisions, that is, when the waiting actually occurred. Thus, the results of the study show that the values of time based on hypothetical situations, without the real consequences of their decisions, can differ significantly from the values when these situations actually occur. This can lead to incorrect or ill-informed decisions in transport policy planning and investment.
