Value of travel time, price and income elasticities Clause Samples

Value of travel time, price and income elasticities. Understanding a passenger’s willingness to pay as well as the reaction to a price increase of a particular travel alternative is very valuable in the determination of different passenger profiles. This section hence outlines important factors and shows differences in regard to region covered or passenger type considered. Value of time (willingness to pay) The amount of money a passenger is willing to pay in order to save a unit (i.e. minute) in travel time, keeping overall utility constant. Price elasticity of demand The (percentage) change in the amount demanded (i.e. of a travel alternative) considering a one per cent change in the price of this alternative. Income elasticity of demand The (percentage) change in the amount demanded (i.e. of a travel alternative) considering a one per cent change in the income of a person (traveller). Different studies elaborate on passengers’ willingness to pay and respective values of time in regard to air travel as well as other transport modes (see Table 6). These values strongly depend on the various factors outlined in the previous sections and depicted in Figure 26. User characteristics Household composition Trip purpose Value of (travel) time External factors Local environment Weather Travel conditions Urban vs. inter- urban journeys Waiting and walking times Amount of time savings Interchange facilities Use of travel time Time of day In regard to air travel, a range of studies investigated the airport access choice parameters including time and price of different alternatives. Tsamboulas et al. (2008) consider the case of Athens airport and passengers’ willingness to pay in order to reduce airport access time. The authors differentiate by travel purpose, access mode, and passenger origin. The results imply that business travellers have a higher willingness to pay, that willingness to pay of private mode users exceeds that of public transport ones, and interurban travellers have a higher one than urban passengers. Although only tested for the case of Athens, this study gives important insight into the distinction by different parameters. ▇▇▇▇ et al. (2003) also assess airport access choice, here with an application to potentially competing airports in the San Francisco Bay Area. The results show that leisure passengers are more sensitive to air fares than business passengers and that the latter are more sensitive to flight frequencies. The decision making factors hence differ by passenger type. General 83% 25-50% ...
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