Benefits of travel time savings for freight transportation : beyond the costs

provided by Research Papers in Economics

Benefits of Travel Time Savings for Freight Transportation:
beyond the Costs.

Abstract

The purpose of this presentation is to investigate whether current practices in Cost Benefit
Analysis do not underestimate the actual benefits accruing to the economy when transport investment
reduces transport time.

In a first section we define the different time related attributes of transport. In a second section we
investigate the current practices in various European countries. We find that the overwhelming
majority of countries estimate the benefits of improved network through the reduction in transport
costs. In a third section we advocate the idea that the total benefits may exceed this mere cost
reduction. We show that shippers exhibit a significant willingness to pay for faster deliveries and
examine the cause of this situation. We demonstrate that a benefit analysis based on traditional
definitions of surplus should take into account these additional effects. This question should be
carefully distinguished from the recurrent question of indirect effects. Eventually we try to identify
methods to measure these extra benefits and the likely magnitude of these effects. We review results
obtained by previous attempts to measure this willingness to pay, based on RP data and SP exercises.

Jérôme Massiani.

C.R.E.T.E.I.L.

Université Paris12, Ave du général de gaulle.

94010 Créteil France.

Phone: 00 33 1 45 17 71 14

Fax: 00 33 1 45 17 71 48

eMail: [email protected]

Keywords

Freight value of time, cost benefit analysis, double counting, surplus.

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