Ahmed El-Geneidy and Ehab Diab @ McGill have a new paper out: Understanding the impacts of a combination of service improvement strategies on bus running time and passenger’s perception 10.1016/j.tra.2011.11.013 in Transportation Research Part A: Policy and Practice :

“This study uses stop-level data collected from the Société de transport de Montréal (STM)’s automatic vehicle location (AVL) and automatic passenger count (APC) systems, in Montréal, Canada. The combination of these strategies has lead to a 10.5% decline in running time along the limited stop service compared to the regular service. The regular route running time has increased by 1% on average compared to the initial time period. The study also shows that riders are generally satisfied with the service improvements. They tend to overestimate the savings associated with the implementation of this combination of strategies by 3.5–6.0 min and by 2.5–4.1 min for both the regular route and the limited stop service, respectively. “

Time savings produce a “time illusion” in transit just as in HOT lanes, where travelers over-estimate their time savings from paying the toll and traveling at free-flow speed compared to the parallel untold road. This time illusion is a good thing for service providers, as customers over-credit the benefits they receive. This might, however, imply people overestimate the time loss from a reduction in service. In general, people overestimate their actual travel time (Parthasarathi et al. working paper).