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ABSTRACT
We show that constancy of value of time (VoT), which is assumed in generalized transport costs, can generate a significant bias in trip demand forecasts when travel time and travel fee change, because VoT endogenously changes in reality. Modeling shopping behaviors, we demonstrate that the change in trip demand through changes in travel time and travel fees differs even if the change in the travel fee is equivalent to the changes in the travel time in terms of generalized transport cost. This is because a decrease in travel time decreases VoT, whereas a decrease in travel fee increases VoT. Our simulation shows that the difference is large when there is a high substitutability between sites. This implies that demand estimation assuming a fixed VoT could be inadequate, and that it should treat VoT endogenously.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1. Hayashi and Morisugi (Citation2000) show that wage rate is often used as a representative index for VoT in project appraisal.
2. Working time lost is generally valued at the wage rate plus any related overheads. All other time, including commuting time, is valued at a fraction of this representing the alternative value of leisure and this can vary with trip purpose and type.
3. Meta-analysis on the VoT savings is presented by many papers (e.g. Zamparini and Reggiani Citation2007a). According to the analysis, VoT depends on income, trip purpose, and transport mode.
4. Kono and Morisugi’s (Citation2000) study is written in Japanese. But, Jiang and Morikawa (Citation2004) explain their method and results of comparative statics of VoT concisely in Section 2.2.
5. Although the traditional assumption of ‘continuous control of working time’ might be applicable to some lawyers and individual consultants, the assumption is so unrealistic as to be inapplicable to most individuals – not only in the short term, but also in the long term, as explained in the main text.
6. Unit of a fixed period can be freely defined. If we change the units, it is enough to change the prices according to the change. For example, the price of 1 l of milk can be exchanged with the price of one gallon of milk if the unit is changed. In this way, we can obtain the same numerical results for any unit.
7. The number of visits to shopping centers usually does not bring utility to consumers. However, for simplicity, we assume that the amount per shopping trip is constant because the transportable amount per shopping trip is fixed and daily food should be fresh. In this situation, the amount of goods purchased at the store in our model is proportional to the number of visits to the shopping centers.
8. For simplicity, we assume that the utility function does not include travel time in the same manner as in the literature (Becker Citation1965; Train and McFadden Citation1978, and so on). In this case, VoT is equivalent to VoT as a resource. If the utility function includes travel time (DeSerpa Citation1971; Bates and Roberts Citation1986, and so on), VoT is composed of VoT as a resource plus VoT as a commodity. In this paper, we focus on VoT as a resource.
9. B (units/month) in the base case is 3 times × 30 days = 90 units. Because of the price change, the quality-adjusted amount of food per meal will change when the transportation improves. For example, worker 2 increases B (units/month) from 90.0 to 91.959 when the travel time decreases from 90 to 70 min, as shown in Table (ρ = 0.3). That implies that the quality-adjusted amount per meal increases from 1(= 90 units/90 times) in the base case to 91.959 units/90 times.
10. This assumption is not essential. If differs between two shopping centers, we can set two prices as
and
. The following analysis would not fundamentally differ so much because we calibrate parameters using expenditure at each shopping center.
11. Lagrangian in monetary terms is often used in economics (e.g. Pines and Kono Citation2012 and others).
12. Some of the homemakers and students work too. However, they answered to the survey that they are mainly homemakers or students.
13. We use the total prices of the items ‘Clothing and footwear’ and ‘Culture entertainment, except culture entertainment service’ as the shopping price. We assume that people buy similar goods at each place, and therefore, we use the sum of these expenditures divided by the amount of shopping at shopping centers 1 and 2 as ‘the price of one shopping trip.’
14. The travel fee is the round trip fare from the ‘Teraoka 1-Chome Kita, Izumi-outlet’ bus stop to Sendai station. For worker 2, the travel fee is zero because he/she can do shopping on the way to work/home.
15. This survey collected data for weekdays, Saturday, and Sunday separately. Thus, we calculate the amount of time spent shopping per week by first adding the weekday data multiplied by 5, the data for Saturday, and the data for Sunday. Second, we calculate the amount of time spent shopping in 4 weeks. Finally, we calculate the amount of time spent shopping in 30 days by multiplying the amount of time spent shopping in 4 weeks (28 days) with 30/28. To assume that the shopping expenditure and time are equal in both shopping centers, we use the amount of time spent shopping in 30 days divided by the amount of shopping at shopping centers 1 and 2 as ‘the time spent in one shopping place.’
16. Travel time is the round trip time from the ‘Teraoka 1-chome kita, Izumi-outlet’ bus stop to Sendai station. For worker 2, the travel time is zero because he/she can do shopping on the way to work/home.
17. We use the amount of time spent eating in 30 days divided by 90 (3 meals per day) as the ‘time spent eating.’ In the case of ‘meals at home,’ ‘cooking time’ is needed. The ‘cooking time’ is obtained from the ‘Sumaino-Katachi questionnaire’ by Mujirushi-Ryohin.
18. In practice, substitution elasticity should be estimated using practical data. However, we do not have any appropriate RP data for the estimation of substitution elasticity. So, we assume two cases. The latter case assumes extremely large substitution elasticity as a comparative case.
19. The assumed two transportation projects are unrealistic; any kind of transportation project usually changes both travel time and travel fee. However, for simplicity, we assume projects which only change one of these.
20. These properties are proved by Kono and Morisugi (Citation2000). See a concise review which appears in Jiang and Morikawa (Citation2004).