Why time is money on the road

This post originally appeared in Symposium Magazine.

In my post yesterday, I described how my team and I set up an experiment to assess the conversion of HOV lanes to HOT lanes – basically, a move that asks drivers to decide how much they want to pay to drive at peak times. We recruited subjects who live along the I-394 corridor in Minneapolis and had a daily route of at least 20 minutes so that the alternative commutes would make sense, assuming they were shorter.

The other conditions were that the I-394 route had to be a plausible alternative for them; the drivers had to commute on a regular basis; they had to work near downtown Minneapolis, and they had to drive a car alone. We obtained permission to install a GPS unit in their vehicle, and they had to follow our instructions about which route to take during which weeks.

We then gave them three sets of alternative routes. One was the HOT Lane on I-394; the second was the general-purpose (un-tolled) lanes; and the third was a parallel arterial, which depended on where they lived, and which would be most feasible. We asked them questions every week about what they were doing and gave them two weeks of free choice to establish their baseline preference. After that, we divided the next six weeks into three two-week periods in which they drove on each of the three alternatives. For the final two weeks, travelers were again free to pick a route, allowing us to see whether their behavior changed after the experience.

The study’s aim was to ascertain what we call the “Value of Travel Time Reliability.” This is how much of a premium drivers are willing to pay to have a low variation in their travel time. The advantage of the HOT Lanes is that they don’t just offer a lower travel time, but more importantly, they offer a much more reliable or predictable travel time. Indeed, they vary much less than the congested general-purpose lanes.

Depending on how we measure variability, we got estimates of value of time ranging from $9 to $20 an hour – in other words, the premium a driver is willing to pay for speed. As for the “price” of reliability, we got values ranging from $3.80 to $18.23 an hour. Other people have tried to estimate a reliability ratio using a variety of methods, and the numbers vary widely. But they tend to be on the order of 1.0, indicating that a driver considers avoiding a minute of unpredictability is as valuable as avoiding a minute of expected travel time.