It is conventional to value transport investments by estimating the time savings to users, which are multiplied by a value of time derived from Stated Preference studies, essentially survey questions that ask people to trade off time against money. A major re-estimation of the value of travel time commissioned by the Department for Transport prompted me to review the appropriateness of this methodology.
I have long been concerned with the use of travel times savings. The National Travel Survey shows that average travel time has not changed over the past 40 years, during which period many £billions have been invested in the transport system, based on the supposed value of time savings. The NTS findings show that there are no time savings in the long run, the relevant perspective for investment in long-lived infrastructure. The real benefit of such investment is to improve access to land that can be developed to accommodate a growing population and boost the economy. A good example is the regeneration of London’s Docklands made possible by rail investments. So we need an approach to investment appraisal that focuses on the spatial impact, given that the outcome is additional movement of people and goods through space.
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