CPB

The Influence ofTechnologies and Lifestyleon the Value of Time
Discussion Paper

176
Phil Goodwin
University of the West of England,
BristolRoundtable

Corporate Partnership
Board

176
Phil Goodwin
University of the West of England,
BristolRoundtable

The Influence ofTechnologies and Lifestyleon the Value of Time
Discussion Paper

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Cite this work as: Goodwin, P. (2019), “The Influence of Technologies and Lifestyle on the Value of Time”,
International Transport Forum Discussion Papers, No. 2019/03, OECD Publishing, Paris.

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Table of contents
Introduction: Why Zero Value of Time? ....................................................................................................... 4
The importance of Value of Time ............................................................................................................ 4Seven ways that this importance may have been overstated ................................................................. 5
The evolution of Roundtables on the Value of Time .................................................................................... 7
Theoretical and practical research on an estimation of time-saving:
European Conference of Ministers of Transport Roundtable, 1969 ....................................................... 7
Value of Time: European Conference of Ministers of Transport Roundtable, 1976 ............................. 10
Time and Transport: European Conference of Ministers of Transport Roundtable, 2003 .................... 12
Young people: Travel, socioeconomic explanations, and hypotheses for values of time ............................ 14
Trend shifts in young people’s travel .................................................................................................... 14
Socio-economic explanations ................................................................................................................ 15
Hypotheses for Values of time. ............................................................................................................. 16
References ................................................................................................................................................ 18© OECD/ITF 20193

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Introduction: Why Zero Value of Time?
The title of this Roundtable reflects widespread concerns that too much emphasis may be given to theimportance of speed in determining travellers’ choices, and in judging the value for money of public
investments. Technical and social change are in some cases reducing the apparent Value of Time savings
by making travel more convenient, more comfortable, or by providing the opportunity to undertake
useful economic activity or pleasurable social activity. In other cases there are considerations which may
be more important than speed, such as the improvement of health by spending time on active travelmodes notably walking and cycling, and environmental benefits including energy conservation and the
reduction of harmful emissions. There are cases where travel time savings get used for more or longer
distance travel, or get converted into wider effects on land use or non-travel activity, which can make thelink between initial speed increases and final costs and benefits complex, sometimes affecting theestimated value and nearly always changing the incidence of who benefits and who loses. Even theinterpretation of ‘Value of Time’ is difficult, since it can actually be telling us more about the different
value of money for richer and poorer groups. The overall effect of these factors suggests that we should
put less attention on the value of travel time savings, through speed increases.
Although these issues have come to the fore due to the rapid change in social and economic trends, andthe technologies of transport and communication, they are in general not new issues. This is the fourth
Roundtable on values of time organised by the International Transport Forum (ITF) and its predecessor,
the European Conference of Ministers of Transport (ECMT) and nearly all of these issues have been
discussed from the earliest days, though not always resolved. A review of three earlier Roundtables, in
1969, 1976 and 2003 identifies continuing attention to these themes, from the point of view of
explaining choices, appraising investments, and assessing equity. Some important conclusions from thisearlier work may have to be relearned.
There have recently been substantial shifts in the trends of travel behavioural choices, notably affecting
orientation to car use by younger age groups, and at the other extreme the effects of longer life
expectancy, both moderated by area of residence, the nature of employment contracts, security andmigration. Each of these will in turn have affected indicators like Value of Time, raising issues of equity as
well as forecasting, and potentially very different impacts in the short and long term. Hypotheses below
are suggested for the likely effects on values of time, and how they should be used.

The importance of Value of TimeAt face value “Zero Value of Time” seems to make a suggestion that travel time savings should not begiven a monetary value. It is therefore necessary to start the paper by considering what this means andwhy it is relevant.
Attribution of a monetary value to time spent travelling or, more precisely, the value of travel timesavings (VTTS) has been important for two different though connected applications.
Value of Time as a parameter that helps to estimate behavioural choices

People are assumed to gain a benefit from spending less time on travel so they can spend more time onsome other more beneficial activity. In situations where to travel faster will cost more money, there is a4

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trade-off to be made between the time spent on different travel activities and the money cost.
Knowledge of this trade-off should help to explain, and therefore predict, choices between different
modes, destinations, routes, times of day, and frequency of making trips, as calculated in the mostreliable and available behavioural choice models.

Value of Time as a parameter that helps to determine value for money inallocation of public funds

There may be an economic benefit to society as a whole by reducing the time spent travelling, either
from the sum total of the individual benefits made by individuals, or by enabling greater economic
productivity. If so, then it will be worth investing economic resources in improved (essentially, faster)transport services in order to deliver a greater economic benefit, as calculated in the most reliableavailable methods of social cost-benefit analysis.
These two related calculations both require a unit which has dimensions of money per unit of time (forexample, pence/minute, euros/hour, etc.). There is a substantial volume of empirical and theoreticalresearch which produces such parameters, in great detail, for very many different types of people andactivities and circumstances, and their application results in estimated benefits, to individuals or the
economy as a whole, of huge sums of imputed value, typically by far the greatest element of thecalculated benefits. This central concept, spending more money in order to travel faster, has been adominant feature of the formal methods of prediction and appraisal.

Seven ways that this importance may have been overstatedConsidering the above, an increasingly critical view that the benefits calculated in this way may give toomuch weight to ‘time’ as compared with other criteria of importance to individuals and objectives oftransport policy has grown in recent years. Not all these suggestions are consistent with each other, andsome have been controversial and discussed energetically. Without implying judgement on the merits of
the arguments, the following counter suggestions have been raised:
1.

Time is not as overwhelmingly influential in individual travel decisions as has been thought.
Comfort, convenience, noise levels, air quality, opportunity for exercise, access totelecommunication signals and the conditions to use them, social status, desire for variety,desire for habitual reassurance, enjoyment of company or conversely privacy, conditions suitablefor undertaking productive work or private enjoyment during travel, access to refreshments andtoilets, and many other factors affect choices. By putting too much emphasis on duration, andnot enough on the other factors, there will be too much emphasis on speed, and predictions of
behaviour will be inaccurate.

2.

There is evidence that the overall time spent travelling changes little as a result of faster travel insome analyses but not in all. People do not ‘save time’ so much as use that ‘some’ or all of thattime to travel more frequently or to more distant destinations. There may well be benefits ofdoing so in a different format, but there may also be costs, for example by reduced accessibility
for some due to consequential land use changes, and by the generation of extra traffic which ingeneral erodes, or in certain extreme circumstances outweighs the intended time savings. The
eventual gainers will not necessarily be the same people at all as those whose hours of time

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saving were assessed in an appraisal: the initial advantages to them will have an effect, forexample, of changing land prices, resulting in a shift of benefit between travellers and landowners. In the limit, this argument suggests that there is no reduction in the time spent
travelling and it is therefore misleading to value the benefit in units of time.

6

3.

The Value of Time is not a simple single measure of benefit, but a ratio of two quantities, themarginal utility of time and the marginal utility of money. It is not credible to assume that theutility of time is different for everybody, but that the utility of money is the same for everybody.
Therefore when we estimate a Value of Time we have to cross-examine the context, to assess
whether what we are detecting is simply that some people have more money than others, or
consider it of less importance. If time and money are interchangeable currencies (as is implied in
the phrase ‘Value of Time’), the distributional impacts of an initiative would have to take accountof both.

4.

There are some travel activities whose benefits are greater the longer is spent on them (within
limits). This especially relates to the health benefits of active travel notably walking and cycling,
but can also apply to that category of travel where the experience of travel (e.g. sightseeing) isthe benefit sought. In these circumstances simply reducing the time spent will not be anadvantage. Walkers and cyclists may well choose to take a longer, slower route specifically tospend more time on them, and tourists will not want to pay more for a briefer tour.

5.

Similarly, some train journeys particularly are suitable for working by using on-line connectivity
or suitable tables, power sources, lighting and ride comfort. Those who do this often (including
some academics) find that there are discrete amount of time which can be usefully spent onmarking scripts or writing papers for conferences. An hour or more may be useful, but lessdoesn’t give sufficient time for focus. In these circumstances arriving at your destination earlier is
not a benefit, and can be irritating. The same argument is increasingly being offered if
autonomous vehicles offer the opportunity of other activities while travelling by car without
needing to drive.

6.

Some transport improvements are specifically addressed to higher standards of comfort. A
feature of the interaction between comfort and speed is that empirical work has found that lesscomfortable travel, other things being equal, has higher values of time (that is, people areprepared to spend more money to save an hour of uncomfortable travel than comfortable
travel). Therefore one of the effects of higher comfort is to lower the Value of Time savings. One
can say that achieving a lower Value of Time is a mark of the success of such improvements.
Therefore a progressive reduction in the Value of Time, achieved in this way, is a mark ofprogress.

7.

There is an additional problem that the now widespread use of stated preference methods,
based on hypothetical experiments using formal controlled variation in alternatives specificallydefined by their time and money costs, makes it too easy for the analysts to persuade
themselves that they have eliminated (often expressed as ‘taken account of’) other complicating
factors This seems to make it possible to deduce well-defined trade-offs in the experiment, but
in conditions which do not correspond with the more complex interweaving of multiple
considerations in real life. The outcome can be to produce estimates with high quality statistical
performance and low quality behavioural reality: the simulation, by its specification, is bound toaccord a significance to travel times whether or not that mirrors the real decision.

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This list should not be taken as implying uncritical acceptance of all the points. In each case there has
been an argument, and mostly a defence offered to defend orthodox practice. The defence has in turnbeen criticised, and a more or less permanent debate ensues. But the important point is that, taken as awhole, there is a shift in mood about travel choices and transport appraisals.
Put simply, there is a widespread current of opinion that too much emphasis has been put on speed, andnot enough on other policy objectives, and this is reducing the reliability of forecasts and the value formoney of investments.
Hence, in a rather exaggerated way, the phrase ‘Zero Value of Time’ is helpful. It reflects a mood that a
progressive reduction in the Value of Time can be a mark of success, or a mark of more realistic
understanding of what is important, or both. Achieved reductions in the Value of Time can beinterpreted as a measure of the benefits from improving the conditions of travel.
In this context it is not axiomatic that the main research task is to encourage an everlasting process ofmore and more detailed calculations of values of time separated by types of individual and context andmode and location and duration and size and alternatives available for the use of the time saved. This
may not be helpful if it ignores this bigger questions of what are values of time for, and what do they
mean? Since a large part of the agenda of this Roundtable is devoted to precisely such calculations, it isnecessary to assess them in the context of the wider question: why are we doing this?
This is not primarily a theoretical argument, but a practical one: what is the relative importance of time
as compared with health, comfort, reliability, air quality, energy conservation and climate change? What
do we do with the detailed results to be discussed at the Roundtable?

The evolution of Roundtables on the Value of Time
None of the issues raised in the above arguments for downgrading the importance of values of time, andthe items on the agenda for the current one, are completely new. These points have been discussed atRoundtables of the International Transport Forum (ITF) and its predecessor, the European Conference ofMinisters of Transport (ECMT) and form part of an international literature of considerable size on thesubject dating back to the 1960s, with precursors even as far back as the 1930s. A full historical literature
review is beyond the scope of this paper, but it is useful to give a summary of how some of the sevenaspects listed above, seen as steps towards a consideration of Zero Value of Time, have been treated inthree earlier Roundtables at the ITF.

Theoretical and practical research on an estimation of time-saving:
European Conference of Ministers of Transport Roundtable, 1969
A single introductory report on Value of Time was produced by Harrison and Quarmby (1969) of theUnited Kingdom Ministry of Transport for a Roundtable nearly 50 years ago. Together with a closely
related advisory note issued by the Ministry (McIntosh and Quarmby, 1970), these documents gave an
overview of all the theoretical, empirical and practical information available at that time. They tackled© OECD/ITF 20197

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the widest range of issues of principle and practice, and potentially created the agenda for subsequent
Government practice in the United Kingdom and many other countries. It should therefore beconsidered one of the most influential of all the Roundtable reports, though its importance, from the age
before internet citations, is not now realised. In the direct quotations below, readers may appreciate theclarity and style of its language, which is a model of scientific writing.
Among the many topics, four are still particularly relevant to the issues discussed above.
Values of time only usefully derive from choice if the choices are realistic

The authors argued“When travellers make choices… they may well not be making a conscious trade-off between timeand money; indeed there are usually very many other factors that both consciously and unconsciously
affect their choices. For the researcher intent upon estimating a value of travel time, there is a danger
in principle in trying too hard to find a value of time in situations where time or cost may not be
important variables at all. All of this points to the need to approach the analysis of a choice situation
with the primary object of trying to explain the choice, rather than trying to derive a value of time. If avalue of time emerges from the explanation of choice – then the effort is rewarded: if it does not, thennothing can be gained by twisting the explanatory relationship so as to yield a time value”
Comment: This was written before stated preference methods became common (although some earlyversions were cited). The problem now they are nearly universal is that the experimental design appears
to have solved the problem of complicating factors, by scrupulously removing or controlling for them.
This does not solve the underlying problem. If the respondents’ real experience is of choices whosecritical influences are not the controlled variables in the study, they may well give ‘true’ answers to thequestions as stated. The framing makes it almost impossible not to reveal a Value of Time, and theseanswers may give values whose statistical diagnostics are extremely good. But there must be a serious
question about their reliability for forecasting real world choices where those complicating aspects
inevitably reassert their importance. This underlines the point that, in a sense, stated preference
methods are ‘too easy’ in investigating many new segments of people or time. The straw, however,remains straw, not gold.
Other important variables, not themselves measured in units of time, arenevertheless experienced over time, and will affect the estimated values

The authors argue“’Time saving’ is a composite entity taking on different attributes in different situations – freedom
from irritation at delays, freedom from physical effort, from overcrowding. Reduction in thelengths of time that have to be devoted to enduring these various conditions may be accounted
valuable in themselves even though no explicit consideration is given to expanding a traveller’s
range of activities, and hence ‘saving time’ may be valued, even though the savings are not seen in
any way as productive”
Comment: Here there is a problem. If the attributes of different modes, say, are inherently andpermanently linked to travel using them, it may be reasonable to increase or reduce the value of thetime spent travelling to allow for discomfort and so on. But this inherent link is rarely the case, and never

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in the long run. Consider the discomfort of uncomfortable seats on buses. It would be a distortion ofpolicy to focus all the attention on increasing the speed of the buses, so the discomfort can be endured
for a shorter period: it may be more sensible to look at changes in design to make the seats more
comfortable. Where the Value of Time is modified by such other considerations, the resulting value has
nothing useful to say about the effects of improving the conditions, and may indeed give exactly thewrong signal. Attributes which are not unchangeably associated with duration should, as far as possible,
be the subject of separate investigation looking at their own importance and how to improve them. The
quote above should be considered a temporary phase in the study of Value of Time, not a permanentprinciple. This in turn underlines the implication that a reduction in the Value of Time spent travelling
may be treated as providing benefit analogous to a reduction in the duration of travel. This is rarely
done. Some promoters of investments to increase speed resist research that seems to lead to lower
values of time, for fear that this will undermine the cost-benefit case for their scheme, but that would
not be a legitimate or necessary argument.
So called Values of Time are in part (or totally) measures of the value of money

Harrison and Quarmby (1969) were very much more explicit about the problem of the marginal utility ofmoney than most other authors since. The following quotation raises profound and still unsolved
problems.
“… all empirical studies have shown that the rich are more inclined to pay to save time than thepoor. Some very familiar economic arguments suggest that this observed fact should not be
accepted normatively. Consideration of the usual proposition about the declining disutility ofmoney or, less abstractly, notions of equity or a more desirable distribution of income, would
suggest that some counter-weighting should be employed”.
This was a particular problem to the argument that behavioural (observed) values of time should be usedas the empirical base in appraisal of the value of money for public investments (which, other things being
equal, is the natural desire of many economists):“… it is the method itself which has inherent income distribution implications…The issue isparticularly acute since, by their very nature, cost benefit appraised investments are not paid for
directly by beneficiaries, hence employment of this basis of evaluation will tend to shift investment
towards the richer sections of the community, without any compensating increase in paymentsfrom them. Thus, by normal criteria, the distribution of income will be worsened”
Comment: This elegant and clear argument failed to have the same influence on practice, in terms ofsystematic adjustment to the values of time is a way discussed in the next section. But it has beennormal that at least in valuing non-working time, some form of ‘equity’ average Value of Time has beenused. However, the more different values are accorded to different population segments or activity
types, the more the issue will arise again: to what extent are we actually measuring not the utilities oftime saving, but the utilities of saving money correlated with the segmentation chosen? This is discussed
further below.
On the very last page of the report of Roundtable, in the section summarising the discussions, a briefcomment made is directly related to the discussions at our own Roundtable:“Research has so far failed to differentiate sufficiently between social groups, yet these imply
differences in occupational and housing mobility, attitude to disutility of travel, etc. Thisparticularly applies to the study of manual workers’ evaluation of time.”© OECD/ITF 20199

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The comment about manual workers probably referred to some discomfort that the empirical studies todate had been excessively focussed on office workers and professionals. However, the point is a wider
one, and it is interesting that this one sentence has taken nearly half a century to find its way as a key
objective of the current Roundtable.

Value of Time: European Conference of Ministers of Transport
Roundtable, 1976
Findings of this Roundtable also culminated in a single introductory report, by Goodwin (1976). It is clearthat it never acquired the same influential effect as the Roundtable report by Harrison and Quarmby, butreaders may forgive me if I make a brief summary of two of its relevant points, since I was the author of
the report and some of its recommendations deal with unresolved issues which are still, in my view,
relevant to our discussions.
The reciprocal of the Value of TimeThe report built on a distinction made by Harrison and Quarmby (1969) between what later came to becalled ‘generalised cost’ and ‘generalised time’, in a way which radically re-interprets the information
content of the Value of Time and changes its use in appraisal. The author proposed:“It is argued that what is sometimes interested as a value of time should more properly be
regarded as a utility of money…. Behavioural values of time can be used to provide distributional
weights for money costs and benefits”
The suggestion arises from development of the idea of combining time and money (and, sometimes,
other similar costs, though that is ignored here) into a single overall measure of cost which as far as
possible represents the whole disutility spent on travel. There were two main formulations, generalised
cost and generalised time. Exactly the same information is included in both.
G(m) = M + vT, andG(t) = T + M/v
Hence where G(m) is generalised cost measured in units of money, M is the money cost, and T is thetime cost multiplied by v, the Value of Time, to convert it into money units. G(t), by contrast, isgeneralised cost measured in time units (sometimes called generalised time), and the money M isconverted into time units by multiplying it by the reciprocal of the Value of Time.
The Value of Time itself is the ratio of the marginal utility of money and the marginal utility of time, andthe two ways of using it – the value to convert time into equivalent money, or its reciprocal to convert
money into equivalent time – are of identical status in terms of the empirical origin.
However, since the estimated Value of Time increases with income, the two formulations have different
effects. Generalised cost implies that over the long term, as general income rises, there will be anincrease in the perceived cost of travel, due to the rise in the value of the time component. Generalisedtime, on the other hand, will tend to decrease in the long term, due to the reduction of the value of themoney component.
The argument, in summary, suggested that generalised time was likely to be more useful than thegeneralised cost, because it represents a more fundamental currency, notionally available equally toeverybody, not subject to inflation, exchange rates, money markets, or arbitrary devaluation. Hence it

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followed that the so-called ‘Value of Time’ could more realistically be interpreted as measuring thedeclining marginal utility of money as income rises. Instead of using the empirical results to say that timesavings were more valuable to one group than another, we would be able to say that money costs, orsavings, were less valuable to one group than another. The Value of Time in use would not be a weight toattribute greater effect to the values of time for one group than another, but less weight to the money
value of the same groups. The UK Ministry of Finance, the Treasury, has for many years recommended
that income related weights should be used to assess the distributional consequences of policies where
equity is an issue, but it is possible this has never been applied in practice in transport applications, by
the reciprocal of the Value of Time or indeed other sources.
Comment: A constant marginal utility of money, and a constant marginal utility of time, are two extreme
cases, but extending the idea to the more general case, one would make the hypothesis that the utility ofmoney is sensitive to the amount of (available) money people have, and the utility of time is sensitive tothe amount of (available) time that people have. As they approach the constraint of their money budget,estimated values of time will fall, and as they approach the constraint of their time budget, estimatedvalues of time should increase – provided the two are not correlated. The implications may beconsidered by Table 1 below, representing the effects of the interaction between the marginal utility oftime and money.
Table 1. Hypothesis for the effects of available time and available money on Value of TimeTime Poor

A low-income employed single parent
with little time or money.

Money PoorTime Rich

Utility of time high and utility of moneyhigh.

A retired pensioner on a statepension, plenty of time but little
money.



True Value of Time indeterminate, butwould be credited with low Value ofTime in usual method.

Low utility of time savings, highutility of money savings.



Revealed Value of Time low.

A high income entrepreneur working all
the hours of the week and receiving alarge income.



A retired person with a very highpersonal pension and much
leisure.



Low utility of money savings, high utilityof time savings.



Low utility of time savings, lowutility of time savings.



Revealed Value of Time high.



True Value of Time indeterminate,
but would be credited with high
Value of Time in usual method.

Money Rich

The example deliberately takes extreme cases to make the point, and reveals that if we do not takeaccount of differences in the utility of money (due to income) and the utility of time (due to lifestyle),then two groups seem to be treated particularly unfairly, the low income person with no time, and thehigh income person with plenty of time. The other two groups will also have a biased calculation, but thebroad comparison is understandable.

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The treatment of housework

The author proposed that the“Time spent on travel associated with housework should be valued as working time rather thanleisure time”
Comment: This proposition derived from a rather simple argument that housework was a productive
activity with an economic value, and therefore should be accorded the higher value of ‘work’ time thanthe lower value of ‘leisure’ time. Since there was not a well-defined market relationship in the way inwhich housework was allocated and done, it would be necessary to use imputed values from the markets
for child care, cleaners, cooks and other providers of similar services. The suggestion was treated rather
dismissively in the report of discussion, using language of ‘feminine pursuits’ that would not really bethought helpful today. But it raises a bigger question, as in the previous example. Some housework,
especially by employed parents, is done in conditions of high time-pressure and low income, and isclearly of economic significance. It would be misleading to interpret the lower willingness to pay for timesavings due to low incomes, as though it demonstrated lower utilities or social productivity.
It is appreciated that this approach differs from the received wisdom that distributional consequences,invariably focussing on money, are outside the realm of economic analysis and should be left topoliticians. It does however fit well into the idea that distributional consequences, for example ofinitiatives like road user charging cannot be assessed purely in terms of the effects of money flows todifferent income groups, but should take into account the resulting effects on time (and other) impactsof the surrounding policy changes, as argued by Anable and Goodwin (2018) in the latest ITF Report on
the subject.

Time and Transport: European Conference of Ministers of Transport
Roundtable, 2003
This Roundtable was not specifically on the Value of Time, but more broadly on the importance of time
considerations in transport, and therefore two of its papers (by Deardoff on International trade andTavassy and Bruzelius on freight) are not considered further here.
Socio-economic factors

The paper ‘Time and Passenger Transport’ by Crozet (2003) reflected on some of the earlier concerns,
albeit extending them into new areas including discounting, and congestion charging. Crozet argued that
“The value of time, which symbolises the monetary value placed on time by individuals, istherefore the product of a process of simplification. As such it theoretically depends upon
individual social economic factors such as wealth, income, socio-professional category, reason for
trip, mode, etc.”
This reinforces the suggestion for distinguishing the values of those factors in estimation.
Stability of Travel Time

There was also a substantial discussion of a new issue raised by Zahavi (1974), on the implications ofempirical stability in the total amount of time spent travelling, and a concern also with the observation
that

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is closely linked to higher incomes”
This was one of the reasons for paying more attention to differences between different social groups.
It is worth noting that Kopp (2003) very firmly dismissed the constant travel time discussion in thesummary of the roundtable discussion:“The presumption of a fixed-time budget has led to concerns that time savings achieved bytransport policy actions are partly undone by the reactions of travellers, with negative
consequences for the environment. The Roundtable assessed the evidence indicating that the
hypothesis of constant travel time budgets is difficult to maintain. Travel time evaluations should
not proceed from an assumption of constancy of time budget. Forecasts of travel demand basedon this assumption tend to underestimate the net benefits of transport policies”.
Comment: This is perhaps an unusually firm conclusion from the type of discussion typical atRoundtables, though I am not sure whether it accurately reflected the discussion. If it did, then it should
be said that it does not entirely represent what happened in research and policy advice subsequently.
The empirical observation that total time spent travelling, while not absolutely constant, neverthelessdoes show a remarkable degree of stability and has been affirmed in many studies since, throughsubstantial literature including Metz (2010) and others.
The interpretation of its significance on benefits has also changed. Probably the most important
contention is that if travel time is constant, it is because the initial benefits of time savings are used formore or further travel. A softer version of the hypothesis, that some of the travel time savings are used
for more travel, is surely now almost universally accepted, being one of the ways in which ‘induced
traffic’ appears. This additional travel will have both benefits and disbenefits, reducing the intended
relief from congestion and increasing energy use and emissions. They must be taken into account. On
the other hand, there are often claimed to be wider economic benefits, which will be reflected inchanges in land values and activity outside the transport sector. These should also be identified. One
contention is that while the time savings may indeed be converted into different types of benefit, thevalue of the time savings still gives the simplest way of measuring the value of these other benefits,
which in a perfect market will be sustained through subsequent stages.

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Young people: Travel, socioeconomic explanations,and hypotheses for values of time
In recent years there has been interest in a reduction in the propensity of young people to use cars,
observed in many countries, but with special features in each. In the United Kingdom this tendency had
first been observed in 2005, and appeared to have started over a decade earlier though had not been
noticed at the time. Since 1945, the baby-boomer generation has been considered as highly car oriented,
acquisition of license and car being considered as a rite of passage into adulthood.
Taking into account the discussions above about influences and interpretations of the Value of Time, thissection takes a recent major study in the United Kingdom of what appears as a substantial shift in thetravel choices and behaviour, and their explanations which do not, in general, give substantial weight toconsiderations of the Value of Time. The changes are so big, however, that they should have implications
for the Value of Time, and potentially interesting further research, so some possible hypotheses aredeveloped.
The study, by a team of researchers from the Universities of the West of England, and Oxford, wascommissioned by the United Kingdom Department for Transport (DfT). Its report, by Chatterjee et al.
(2018) available online, contains many tables and figures and a detailed analysis of both cross section
and longitudinal data, with a particular focus on the quasi-dynamic method of following cohorts of young
people and their travel choices from the age of 17 into their forties and in some cases fifties.
Below is a summary of the main observed trends, and the explanations which seemed most consistent
with the data. Then some conclusions are suggested which would affect values of time.

Trend shifts in young people’s travel
A shift in trends concerning young people’s travel appears to have occurred in early 1990. It was noticed
strongly in the United Kingdom, and to some extent in some but not all other developed economies.
Since then, total trips by young people have been reducing, and most of that reduction is accounted by afall in car trips, drivers and passengers. Public transport trips have actually increased, both absolutely andas a mode share, though not by a large amount.
The proportion of young people having a driving license fell from 48% down to 29% of the traditional
entry age, and 75% down to 63% for people in their twenties. There was a similar fall in the proportion
having access to a household car.
The fall affected both men and women, but the turning point was later for women: the period of ‘peak
driver licence’ was around 1990 for young men, and later, about 2000 for young women. Since then thetrend has been downwards for both, with some year by year variation. The significant feature of this fall
was that for nearly everybody, the probability of having a licence continued monotonically to increase as
they get older, but for each successive cohort that growth was at a lower level. So while the proportion
holding licences grew for every cohort, the overall proportion holding a licence fell. This may have settled
down in the most recent figures we had, for people born in the 1990s. By the end of the period the
young women had nearly converged on the young men, but the older women had not.

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When looking at the car miles driven, as with licenses, each successive cohort has been at a lower level,
though there is no sign of a settling down in the most recent period. So far we have only had 20-25 years
observations since the turning point, and there is not yet any indication of an acceleration to catch up
with earlier cohorts, as there would be if the shift were solely a delay rather than a reduction in car use.
As a result, for young men each cohort has successively less car use up to the age of about 50, but it is
the opposite for men over the age of 50, whose car use is still increasing cohort by cohort. For women,
there is a similar picture, but the numbers are smaller and the curves closer together. It is as though thefifties are now the boundary between youth and age.
An important related phenomenon is that the later you learn to drive, the less you drive when you dostart. This seems to cut across all age groups, including those who started driving decades ago, before
the trend reversal. There must be some self-selection here, but also possibly an effect that travel habits
set up in the early years have a lasting effect.

Socio-economic explanations
The next stage in the project was to explain why this all happened. This looked both at changes intransport, and also demographics, living situation, socio-economic situation, communications
technologies, values and attitudes, and wider mobility. The methods included theoretical and empiricalliterature reviews, studies of trends, and analysis of available data, but not new empirical studies.
In summary, the evidence indicates that the causes of the changes in young people’s travel behaviour do
not in the main stem from changes in the transport services available to them. They have been driven bychanges in young people’s socio-economic situations (increased higher education participation, rise oflower paid, less secure jobs and decline in disposable income). At the same time young people have been
moving into long-term employment later and becoming parents later. Closely tied to these changes there
has been a decline in home ownership and an increase in urban living.
There is less strong evidence but it seems likely that changes in young people’s social interactions(substituting face-to-face interaction with digital communication) and changes in the importance thatpeople attach to driving have also been significant.
It is important to be clear that the influences relate to long-term changes that predate the (2007-8)
global economic crisis and subsequent recession.
Considering the implications for the future, there are few signs that these causal factors are due for alarge scale reversal. There does not seem to be a high probability of a decline in the gig economy,
structural changes in the labour market leading to a return of full term, secure employment. There areno suggestions for substantially reducing participation in higher education, or moving people in massive
numbers out of the cities into distant suburbs. The age of childbearing seems unlikely to reverse. We
know that disposable immediate income will be under pressure from the need to fund pensions andsocial care. There are some calls for a massive redistribution of wealth and income back from old toyoung, but no consensus or substantial policies to do so.
There is evidence that changes by new drivers in their teens and twenties are still having an effect into
their thirties and forties. In the limit that would imply that in the whole population the baby boomers
and their successors are progressively replaced by the millennials and their predecessors, an
uncompleted process now about a third of the way through.

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Hypotheses for Values of time
It should be said that no research was carried out into values of time during this study, either as apotential cause for the changes or as possible results of them. There were no strong indications thatthese were important salient issues. So the conclusions are necessarily tentative. But the following points
are suggested for discussion.

16



There has been no strong tradition that ‘age’ is a mainstream segmentation variable forbehavioural analysis especially related to transport forecasting and appraisal. It has been ofsubordinate interest: few forecasting models treat age as a key input. Yet the shift in travel
behaviour is so strong, and its potential long term implications so great, that we have to takeseriously how central age as a variable, and aging as a process, has been. Therefore there is astrong case for recommending that age should become a primary segmentation variable in its
own right, treated longitudinally with systematic changes as people get older. It will be noticed
that the effects cannot be captured by successive cross section surveys: age has to beconsidered in terms of the aging process. This should be applied to future Value of Time studies.
It will be useful to distinguish age as a segmentation variable, and check its stability over time.
We have nothing to show that this will be important, but every reason to expect that it may be.

Some of the changes observed are definitely connected to income – not as measured byindicators like national average GDP, but the specific income effects of employment trends andthe changing distribution as between older and younger generations which have been so
prominent. In these cases close attention to the effects of income on the marginal utility ofmoney will prove to be important, and as argued above may have a bigger effect on estimatedvalues of time than is usually considered.

However, changes in the conditions of work do also affect the availability of usable spare timeand variation over the day or week (as well as the higher incidence of unemployment). Thus weare likely to observe a significant proportion of the younger age groups with changes in both themarginal utility of cost changes and the marginal utility of time changes, where the effect on
estimated values of time is ambiguous and needs very careful scrutiny to avoid misleading
conclusions.



Correlated factors have been greater incidence of the importance of urban living, rented
accommodation, and higher education. Each of these can have material effects on the cost andtime of travel, and the quality of alternative activities. Values of time may be a suitable
instrument for seeking insight on these.

Finally we note the very rapid changes in the use of telecommunication technologies, which havea variety of quite distinct possible effects on the Value of Time: reduction in the uncertainty ofmode and route choice, potential for useful or interesting activities on line while travelling, and apotential substitute for travel. The evidence base on these questions is sometimes contradictory,© OECD/ITF 2019

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possibly because there are simultaneous effects in contrary directions, some more strongly
affecting one group and others affecting other groups.
Therefore there are potentially rich insights to be obtained from studies of this sort. But it should be
mentioned that exactly the same caveats apply to the generation of large numbers of estimated valuesof time here, as in the other controversial questions discussed. The questions of what do they mean, andhow are they to be used, still have to be addressed.

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References
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Kopp, A (2003), Summary and Conclusion in Time and Transport Roundtable, report number 127,
European Conference of Ministers of Transport, pp.97-115, OECD, Paris.
Chatterjee K. et al. (2018), Young people’s travel – What’s changed and why? Review and analysis.
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Mackie, P., R. Batley and T. Worsley (2018), Valuing transport investments based on travel time savings—
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McIntosh, P.T. and D.A. Quarmby (1970), Generalised Cost and the Estimation of Movement Cost andBenefit in Transport Planning, MAU Note 179. Department of the Environment, London
Metz, D. (2010), Saturation of demand for daily travel, Transport Reviews 30 (5) 659-674
Metz, D. (2018), Valuing transport investments based on travel time saving: inconsistency with United
Kingdom policy objectives, Case studies on transport policy.
SACTRA (1999), Transport and the Economy, Standing Advisory Committee on Trunk Road Appraisal,
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Zahavi Y. (1974), Travel time budgets and mobility in urban areas, US Department of Transportation,
Washington, May

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The Influence of Technologies andLifestyle on the Value of Time
This paper looks at the roles of technologies and other factors
in lifestyle choices, travel patterns and behaviours. Building on
earlier Roundtable reports on value of time, it discusses how recent
behavioural changes might affect the disutility of time spent travelling
relative to time spent on other activities. The paper concludes witha discussion on the implications for policy practitioners aroundmodelling and assessing value of travel time savings.

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Published: 02/2019 | Photo credit: Shutterstock/metamorworks

All resources from the Roundtable on Zero Value of Time are available
at: www.itf-oecd.org/zero-value-time-roundtable.