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Revised Departmental Guidance on Valuation of Travel Time in Economic Analysis
About this Document
The value of travel time is a critical factor in evaluating the benefits of transportation infrastructure investment and rulemaking initiatives. Reduction of delay in passenger or freight transportation is a major purpose of investments, and rules to enhance safety sometimes include provisions that slow travel. As the Department expands its use of benefit-cost analysis in evaluating competitive funding applications under such programs as the TIGER Grant program and the High-Speed Intercity Passenger Rail program, it is essential to have appropriate, well-reasoned guidance for valuing delays and time savings.
DOT published its first guidance on this subject, "Departmental Guidance for the Valuation of Travel Time in Economic Analysis," on April 9, 1997, to assist analysts in developing consistent evaluations of actions that save or cost time in travel. That memorandum recommended an array of values for different categories of travel, according to purpose, mode and distance. For each category, the Guidance specified a percentage of hourly income that would normally be used to determine the value per hour of savings in travel time, a range of percentages defining upper and lower bounds about the normal value for sensitivity testing, and an average hourly income level. Special values were assigned to walking and waiting time, travel by general aviation, and truck drivers.
Revised guidance, labeled as “Revision 1,” was issued on February 11, 2003. The present memorandum, labeled “Revision 2,” adjusts these values for use in the current year, incorporates some additional values and procedures, and redefines the sources of data. In particular, time savings in high-speed rail travel are now identified as equivalent to those in air travel and distinguished from intercity travel by conventional surface modes. Although we find no necessity of altering the normal percentages of hourly income and the ranges of percentages that were assigned in the 1997 memorandum, more recent and appropriate sources are used to specify hourly incomes. In particular, the income data used in this guidance are derived from public and regularly updated sources that will allow the Department to update the values annually. Also, the revised guidance projects higher values of time in future years to reflect reasonably anticipated growth in real incomes. Included in the discussion is a bibliography of documents available online that provide an overview of the research literature in the field and the recommendations developed by experts in several countries.