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2015-10-09 | project

The Value of Automobile Travel Time and Its Congestion Policy Implications

The overall objective of the study is to provide the value of time estimates for automobile users on a congested road using a stated preference survey. The purpose of this study is to obtain the public preferences for time savings on a congested road, which we believe could provide important policy inputs for ongoing congestion pricing discussions in Beijing.

Being the capital city of China, Beijing has experienced an explosive growth during the last three decades. The total number of automobiles in Beijing Metropolitan Area was increased from 2.583 million in 2005 to 4.809 million in 2010, in which about 3.207 million were owned by the individual households. The annual growth rates for the automobiles and private automobiles were reached at 13.2 % and 19 % respectively. It is projected the vehicle population will reach 7.50 million in 2015.  Along with this wave of vehicle ownership growth, Beijng has become a far more mobile society. As a result, Beijingers are able to travel longer distances more frequently and pursue more and more diverse travel needs.

On one hand, the result of this phenomenon is that people are enjoying many benefits associated with mobility; on the other hand, this rapid mobilization has already generated a wide variety of environmental problems, such as increased greenhouse gas emissions, local air pollution and urban congestion. These problems are a clear case of moral hazard – society as a whole bears the costs of the increase in transport options, not just the individuals who directly benefit from this increase. For example, according to the Millennium Cities Database (MCD, 2007), Beijing was ranked as the most congested city in the world by virtue of the fact that the average travel speed in the city was the lowest among all of the cities covered by the report.

In order to alleviate urban traffic congestion, Beijing municipal government is actively exploring some market-based instruments, such as congestion pricing in the announced “12th Green Beijing Five Year Development Plan”. So the question is, how much is automobile travelers are willing to pay for time saved on a congested road, and would travelers value the time savings congestion pricing would generate at more than they would have to pay for these time savings?  To answer these questions could help the policy makers to gain more information regarding political acceptance of this policy, and to contribute to ongoing congestion pricing experiments and policy designs.

The project will be conducted by Ping Qin from the School of Economics at Renmin University of China, with collaborations from Hang Yin, and Fredrik Carlsson. To assess the automobile travelers’ willing to pay for reduced traveling time on a congested road, we will conduct a choice experiment to Beijing residents, in particular the automobile travelers who regularly drove to work and faced some congestion on the way to work.

As for the project outcome, we plan to write to one working paper that will be submitted to one international journal, and one policy brief that will be submitted to relevant government agency, such as Beijing Transportation Research Center.