Working Papers, Swedish National Road & Transport Research Institute (VTI)
Is the intertemporal income elasticity of the value of travel time unity?
Abstract: The purpose of this study is to estimate the intertemporal
income elasticity of the value of travel time (VTT) and test whether it
differs from one. The empirical analysis is performed on Swedish revealed
preference data, where voluntary job changers' individual wage premium for
commuting time changes is used as an estimate of VTT. The panel structure
of the data implies the opportunity to use a lagged net income variable on
individual level to estimate the income elasticity in an intertemporal way.
The result does not support an intertemporal income elasticity of VTT that
is different from one and this result is robust over several different
empirical specifications. Hence, the policy implication of this study is in
contrast to a recent recommendation by an EU-financed project, Heatco,
which propose an intertemporal income elasticity of 0.7.
Keywords: Value of travel time; Value of travel time savings; VTTS; Intertemporal; Income elasticity; Revealed preferences; (follow links to similar papers)
JEL-Codes: C20; C81; R41; (follow links to similar papers)
38 pages, April 28, 2008
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