Project appraisal - Transport Policy and Planning in Great Britain - page 354

Table 21.3 Values of time (source: TAG unit 3.5.6 (2006) Tables 1 and 2)
Working time (by mode) £ per hour (2002 prices)

Car driver £26.43

Car passenger £18.94

Goods vehicle driver £10.18

Rail passenger £36.96

Bus passenger £20.22

Taxi passenger £44.69

Walker £29.64

Average (all working persons) £26.73

Non-working time (by purpose)
Commuting

£5.04

Other £4.46

identified in studies of situations where individuals choose between slower, cheaper
options and quicker, more expensive ones.) Members of higher income groups for
example will normally be prepared to pay more for quicker journeys. If this difference
were incorporated in the valuation of non-work time it would mean that, all other things
being equal, schemes which benefited higher income groups would be shown to offer
greater value for money. The distributional implications of this are deemed unacceptable
and hence, unusually, they are avoided by adopting overall average (or 'equity') values.
This is different from all other elements in appraisal where behavioural values are used
and distributional implications are considered in a supplementary analysis.
With all types of journey the relevant unit value of time is applied however large or
small the change for individual journeys. Hence the value assigned to 1,000 journeys
of a particular kind each saving 1 minute is taken to be the same as 100 journeys
saving 10 minutes. A significant proportion of the economic benefits of a scheme may
therefore be attributable to time savings which in practice are imperceptible to the
individuals concerned! This is a good example of where the conventions embodied in
cost-benefit analysis (and resulting conclusions on the merits of a scheme) may be at
odds with the 'common sense' perceptions held by groups within the public at large.
By applying the values of time noted above it is possible to aggregate the time and
monetary components of a particular journey to produce a representation of its overall
cost (i.e. implied value) known as 'generalised cost'. The change in user benefit arising
from a scheme is then calculated as the change in generalised cost for each category of
journey (from a particular origin to a particular destination, by a particular mode, for
a particular purpose), multiplied by the number of travellers involved in each case and
summed for all categories. In situations where a change arises in the volume of demand
as a result of a scheme (i.e. induced or suppressed trips) then the convention of 'the
rule of half' is applied to the trips concerned (TAG unit 3.5.3).
For the future, values of working time are assumed to increase in proportion to
changes in income (measured as forecasted GDP per head). The value of non-working
time increases at four-fifths of these values.
'Willingness to pay' is not confined to the value placed by travellers on the benefits
they receive through transport improvements. It applies also to the valuation of impacts