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Uncovering the Distribution of Motorists' Preferences for Travel Time and Reliability: Implications for Road Pricing

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  • Small, Kenneth A
  • Winston, Clifford
  • Yan, Jia

Abstract

Recent econometric advances have made it possible to empirically identify the varied nature of consumers' preferences. We apply these advances to study commuters' preferences for speedy and reliable highway travel with the objective of exploring efficiency and distributional effects of road pricing that accounts for users' heterogeneity. Our analysis combines revealed and stated commuter choices of whether to pay a toll for congestion-free express travel or to travel free on regular congested roads. We find that highway users exhibit substantial heterogeneity in their values of travel time and reliability. Moreover, we show that road pricing policies that cater to varying preferences can substantially increase efficiency while maintaining the political feasibility exhibited by current experiments. By recognizing heterogeneity, policymakers may break the current impasse in efforts to relieve highway congestion.

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  • Small, Kenneth A & Winston, Clifford & Yan, Jia, 2002. "Uncovering the Distribution of Motorists' Preferences for Travel Time and Reliability: Implications for Road Pricing," University of California Transportation Center, Working Papers qt8zd2r34k, University of California Transportation Center.
    • Handle: RePEc:cdl:uctcwp:qt8zd2r34k
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    1. Small, Kenneth A. & Yan, Jia, 2001. "The Value of "Value Pricing" of Roads: Second-Best Pricing and Product Differentiation," Journal of Urban Economics, Elsevier, vol. 49(2), pages 310-336, March.
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    6. Clifford Winston, 1998. "U.S. Industry Adjustment to Economic Deregulation," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 89-110, Summer.
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    11. Chandra R. Bhat, 2000. "Incorporating Observed and Unobserved Heterogeneity in Urban Work Travel Mode Choice Modeling," Transportation Science, INFORMS, vol. 34(2), pages 228-238, May.
    12. John Calfee & Clifford Winston & Randolph Stempski, 2001. "Econometric Issues In Estimating Consumer Preferences From Stated Preference Data: A Case Study Of The Value Of Automobile Travel Time," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 699-707, November.
    13. Bhat, Chandra R. & Castelar, Saul, 2002. "A unified mixed logit framework for modeling revealed and stated preferences: formulation and application to congestion pricing analysis in the San Francisco Bay area," Transportation Research Part B: Methodological, Elsevier, vol. 36(7), pages 593-616, August.
    14. Calfee, John & Winston, Clifford, 1998. "The value of automobile travel time: implications for congestion policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 83-102, July.
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    17. Small, Kenneth A., 2001. "The Value of Pricing," University of California Transportation Center, Working Papers qt0rm449sx, University of California Transportation Center.
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    Cited by:

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    2. Safirova, Elena & Gillingham, Kenneth & Parry, Ian & Nelson, Peter & Harrington, Winston & Mason, David, 2004. "8. Welfare And Distributional Effects Of Road Pricing Schemes For Metropolitan Washington Dc," Research in Transportation Economics, Elsevier, vol. 9(1), pages 179-206, January.
    3. Sándor, Zsolt & Train, Kenneth, 2004. "Quasi-random simulation of discrete choice models," Transportation Research Part B: Methodological, Elsevier, vol. 38(4), pages 313-327, May.
    4. Brownstone, David & Small, Kenneth A., 2005. "Valuing time and reliability: assessing the evidence from road pricing demonstrations," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(4), pages 279-293, May.
    5. Liu, Henry X. & Recker, Will & Chen, Anthony, 2004. "Uncovering the contribution of travel time reliability to dynamic route choice using real-time loop data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(6), pages 435-453, July.
    6. Snarr, Hal W. & Axelsen, Dan, 2007. "Accounting for peak shifting in traditional cost-benefit analysis," MPRA Paper 37060, University Library of Munich, Germany.
    7. Yin-Yen Tseng, 2004. "A meta-analysis of travel time reliability," ERSA conference papers ersa04p415, European Regional Science Association.
    8. David Hensher, 2006. "The Signs of the Times: Imposing a Globally Signed Condition on Willingness to Pay Distributions," Transportation, Springer, vol. 33(3), pages 205-222, May.
    9. Steimetz, Siji S.C. & Brownstone, David, 2004. "Estimating Commuters' "Value of Time" and Noisy Data: a Multiple Imputation Approach," University of California Transportation Center, Working Papers qt4qh7m2d0, University of California Transportation Center.
    10. Jerry Ellig & Alan E. Wiseman, 2004. "Interstate Trade Barriers and Potential Regulatory Competition : The Case of Virginia's Direct Wine Shipping Ban," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 19(Spring 20), pages 26-42.
    11. Vega, Amaya & Reynolds-Feighan, Aisling, 2009. "A methodological framework for the study of residential location and travel-to-work mode choice under central and suburban employment destination patterns," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 401-419, May.

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