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The Value of Urgency: Evidence from Real-Time Congestion Pricing

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  • Antonio Bento
  • Kevin Roth
  • Andrew Waxman

Abstract

In the setting of Los Angeles’s ExpressLanes, we uncover the distribution of individuals’ preferences for time savings in a novel application of a hedonic pricing model. We introduce the concept of the value of urgency, defined by willingness to pay (WTP) a toll to avoid a congested alternative route. The value of urgency does not scale in the amount of time saved, reflecting discrete penalties for late arrival. This value accounts for 87% of total WTP to use the ExpressLanes, while the contributions to WTP from other widely used valuation measures are negligible. We suggest that quality-of-service pricing that varies in real time and removes uncertainty over travel times creates new markets for individuals to reveal their preferences for urgency.

Suggested Citation

  • Antonio Bento & Kevin Roth & Andrew Waxman, 2024. "The Value of Urgency: Evidence from Real-Time Congestion Pricing," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 2(4), pages 786-851.
    • Handle: RePEc:ucp:jpemic:doi:10.1086/731832
    DOI: 10.1086/731832
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