Commuting time choice and the value of travel time

Abstract: In the modern industrialized society, a long commuting time is becoming more and more common. However, commuting results in a number of different costs, for example, external costs such as congestion and pollution as well as internal costs such as individual time consumption. On the other hand, increased commuting opportunities offer welfare gains, for example via larger local labor markets. The length of the commute that is acceptable to the workers is determined by the workers' preferences and the compensation opportunities in the labor market. In this thesis the value of travel time or commuting time changes, has been empirically analyzed in four self-contained essays.First, a large set of register data on the Swedish labor market is used to analyze the commuting time changes that follow residential relocations and job relocations. The average commuting time is longer after relocation than before, regardless of the type of relocation. The commuting time change after relocation is found to differ substantially with socio-economic characteristics and these effects also depend on where the distribution of commuting time changes is evaluated.The same data set is used in the second essay to estimate the value of commuting time (VOCT). Here, VOCT is estimated as the trade-off between wage and commuting time, based on the effects wage and commuting time have on the probability of changing jobs. The estimated VOCT is found to be relatively large, in fact about 1.8 times the net wage rate.In the third essay, the VOCT is estimated on a different type of data, namely data from a stated preference survey. Spouses of two-earner households are asked to individually make trade-offs between commuting time and wage. The subjects are making choices both with regard to their own commuting time and wage only, as well as when both their own commuting time and wage and their spouse's commuting time and wage are simultaneously changed. The results show relatively high VOCT compared to other studies. Also, there is a tendency for both spouses to value the commuting time of the wife highest.Finally, the presence of hypothetical bias in a value of time experiment without scheduling constraints is tested. The results show a positive but not significant hypothetical bias. By taking preference certainty into account, positive hypothetical bias is found for the non-certain subjects.