IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v70y2018icp28-36.html
   My bibliography  Save this article

Estimating the Option Value of managed lanes

Author

Listed:
  • Lee, Sunghoon
  • Burris, Mark W.

Abstract

The option value of managed lanes (MLs) refers to the value travelers' place on having MLs as a backup option for possible use in the future, even if they are not using the MLs for their current trip. This research used detailed travel data from Katy Freeway MLs and general purpose lanes (GPLs) in Huston to estimate the option value of MLs. Based on these data, this research recommends ML option users to be defined as only those travelers who used MLs at least once a year as opposed to all travelers who could have used the MLs (even those who never used MLs).

Suggested Citation

  • Lee, Sunghoon & Burris, Mark W., 2018. "Estimating the Option Value of managed lanes," Research in Transportation Economics, Elsevier, vol. 70(C), pages 28-36.
    • Handle: RePEc:eee:retrec:v:70:y:2018:i:c:p:28-36
    DOI: 10.1016/j.retrec.2018.07.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739885917303463
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.retrec.2018.07.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kathleen M. Painter & Robert Douglas Scott II & Philip R. Wandschneider & Kenneth L. Casavant, 2002. "Using Contingent Valuation to Measure User and Nonuser Benefits: An Application to Public Transit," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(2), pages 394-409.
    2. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-130, January.
    3. Chang, Justin S., 2010. "Estimation of option and non-use values for intercity passenger rail services," Journal of Transport Geography, Elsevier, vol. 18(2), pages 259-265.
    4. Sunil Patil & Mark Burris & W. Douglass Shaw & Sisinnio Concas, 2011. "Variation in the value of travel time savings and its impact on the benefits of managed lanes," Transportation Planning and Technology, Taylor & Francis Journals, vol. 34(6), pages 547-567, June.
    5. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    6. Justin Chang & Soo Cho & Beom Lee & Yonghwan Kim & Suk Yun, 2012. "A dichotomous choice survey for quantifying option and non-use values of bus services in Korea," Transportation, Springer, vol. 39(1), pages 33-54, January.
    7. Ian J. Bateman & Richard T. Carson & Brett Day & Michael Hanemann & Nick Hanley & Tannis Hett & Michael Jones-Lee & Graham Loomes, 2002. "Economic Valuation with Stated Preference Techniques," Books, Edward Elgar Publishing, number 2639.
    8. Laird, James & Geurs, Karst & Nash, Chris, 2009. "Option and non-use values and rail project appraisal," Transport Policy, Elsevier, vol. 16(4), pages 173-182, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xun Zheng & Tomio Miwa, 2019. "A Comparative Analysis on Residents’ Reservation Willingness for Bus Service Based on Option Price," Sustainability, MDPI, vol. 11(1), pages 1-12, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. del Mar Parra López, María & Annema, Jan Anne & van Wee, Bert, 2022. "The added value of having multiple options to travel to. An explorative study," Journal of Transport Geography, Elsevier, vol. 98(C).
    2. Drevs, Florian & Tscheulin, Dieter K. & Lindenmeier, Jörg & Renner, Simone, 2014. "Crowding-in or crowding out: An empirical analysis on the effect of subsidies on individual willingness-to-pay for public transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 250-261.
    3. Xun Zheng & Tomio Miwa, 2019. "A Comparative Analysis on Residents’ Reservation Willingness for Bus Service Based on Option Price," Sustainability, MDPI, vol. 11(1), pages 1-12, January.
    4. Tsvetan G. Tsvetanov & Farhed A. Shah, 2012. "The Economics of Protection against Sea-Level Rise: An Application to Coastal Properties in Connecticut," Working Papers 10, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    5. Lizin, Sebastien & Van Passel, Steven & Schreurs, Eloi, 2015. "Farmres' Perceived Cost of Land Use restrictions: A Simulated Purchasing Decision Using Dscrete Choice Experiments," 2015 Conference, August 9-14, 2015, Milan, Italy 212054, International Association of Agricultural Economists.
    6. Johnson, Daniel & Jackson, James & Nash, Chris, 2013. "The wider value of rural rail provision," Transport Policy, Elsevier, vol. 29(C), pages 126-135.
    7. Jørgensen, Finn & Mathisen, Terje Andreas & Larsen, Berner, 2011. "Evaluating transport user benefits and social surplus in a transport market--The case of the Norwegian ferries," Transport Policy, Elsevier, vol. 18(1), pages 76-84, January.
    8. Justin Chang & Soo Cho & Beom Lee & Yonghwan Kim & Suk Yun, 2012. "A dichotomous choice survey for quantifying option and non-use values of bus services in Korea," Transportation, Springer, vol. 39(1), pages 33-54, January.
    9. Cantillo, Victor & Serrano, Iván & Macea, Luis F. & Holguín-Veras, José, 2018. "Discrete choice approach for assessing deprivation cost in humanitarian relief operations," Socio-Economic Planning Sciences, Elsevier, vol. 63(C), pages 33-46.
    10. Laird, James & Geurs, Karst & Nash, Chris, 2009. "Option and non-use values and rail project appraisal," Transport Policy, Elsevier, vol. 16(4), pages 173-182, August.
    11. Michael Brock & Grischa Perino & Robert Sugden, 2017. "The Warden Attitude: An Investigation of the Value of Interaction with Everyday Wildlife," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(1), pages 127-155, May.
    12. Ben Abdallah, Skander & Lasserre, Pierre, 2016. "Asset retirement with infinitely repeated alternative replacements: Harvest age and species choice in forestry," Journal of Economic Dynamics and Control, Elsevier, vol. 70(C), pages 144-164.
    13. Kau, James B. & Keenan, Donald C., 1999. "Patterns of rational default," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 765-785, November.
    14. Carol Alexandra & Leonardo M. Nogueira, 2005. "Optimal Hedging and Scale Inavriance: A Taxonomy of Option Pricing Models," ICMA Centre Discussion Papers in Finance icma-dp2005-10, Henley Business School, University of Reading, revised Nov 2005.
    15. William R. Morgan, 2023. "Finance Must Be Defended: Cybernetics, Neoliberalism and Environmental, Social, and Governance (ESG)," Sustainability, MDPI, vol. 15(4), pages 1-21, February.
    16. Filipe Fontanela & Antoine Jacquier & Mugad Oumgari, 2019. "A Quantum algorithm for linear PDEs arising in Finance," Papers 1912.02753, arXiv.org, revised Feb 2021.
    17. Weihan Li & Jin E. Zhang & Xinfeng Ruan & Pakorn Aschakulporn, 2024. "An empirical study on the early exercise premium of American options: Evidence from OEX and XEO options," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 44(7), pages 1117-1153, July.
    18. Jun, Doobae & Ku, Hyejin, 2015. "Static hedging of chained-type barrier options," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 317-327.
    19. Thomas Kokholm & Martin Stisen, 2015. "Joint pricing of VIX and SPX options with stochastic volatility and jump models," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 16(1), pages 27-48, January.
    20. Gordian Rättich & Kim Clark & Evi Hartmann, 2011. "Performance measurement and antecedents of early internationalizing firms: A systematic assessment," Working Papers 0031, College of Business, University of Texas at San Antonio.

    More about this item

    Keywords

    Contingency value; Managed lanes; Option value;
    All these keywords.

    JEL classification:

    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:70:y:2018:i:c:p:28-36. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.