Working Paper: CEPR ID: DP14666
Authors: Nicholas Buchholz; Laura Doval; Jakub Kastl; Filip Matejka; Tobias Salz
Abstract: We estimate valuations of time using detailed consumer choice data from a large European ride hail platform, where drivers bid on trips and consumers choose between a set of potential rides with different prices and waiting times. We estimate consumer demand as a function of prices and waiting times. While demand is responsive to both, price elasticities are on average four times higher than waiting-time elasticities. We show how these estimates can be mapped into values of time that vary by place, person, and time of day. Regarding variation within a day, the value of time during non-work hours is 16% lower than during work hours. Regarding the spatial dimension, our value of time measures are highly correlated both with real estate prices and urban GPS travel flows. We apply our measures to quantify the opportunity cost of traffic congestion in Prague, which we estimate at $483,000 per day.
Keywords: value of time; demand in transportation markets; ride hail
JEL Codes: C73; D83; L90; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Consumers' willingness to pay (WTP) for reduced waiting times (J29) | Net value of time (NVOT) (J17) |
| Price elasticities (H30) | Responsiveness to price changes (D41) |
| Value of time during non-work hours (J29) | Value of time during work hours (J29) |
| Individual differences (L15) | Variation in the value of time (C41) |
| Traffic congestion (L91) | Opportunity cost of traffic congestion in Prague (R41) |