Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: The parameters for travel time and travel cost are central in travel demand forecasting models. Since valuation of infrastructure investments requires prediction of travel demand for future evaluation years, inter-temporal variation of the travel time and travel cost parameters is a key issue in forecasting. Using two identical stated choice experiments conducted among Swedish drivers with an interval of 13 years, 1994 and 2007, this paper estimates the inter-temporal variation in travel time and cost parameters. It is found that the travel time parameter has remained constant over time but that the travel cost parameter has declined in real terms. The trend decline in the cost parameter can be entirely explained by higher average income level in the 2007 sample compared to the 1994 sample. The results support the recommendation to keep the travel time parameter constant over time in forecast models but to deflate the travel cost parameter according to forecasts of income increases among travellers and the relevant income elasticity of the cost parameter. Evidence from this study further suggests that the inter-temporal and the cross-sectional income elasticity of the cost parameter are equal. The average elasticity is found to be -0.8- -0.9 in the present sample of drivers, and the elasticity is found to increases with real income level, both in the cross-section and over time.

Keywords: Travel demand forecasting; Inter-temporal income elasticity; Marginal disutility of time; Marginal disutility of cost; Time parameter; Cost parameter; Stated preference; Replicated survey

JEL-codes: C25; D61; J22; R41; R42

22 pages, May 4, 2012

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CTS2012-16.pdf  

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