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Measuring ‘transport benefit’ better

In transport planning there’s a lot of talk about ‘cost-benefit analyses’, leading to a “BCR” (benefit cost ratio) for a particular project. Projects with a BCR of greater than 1.0 deliver more benefits than the money expended upon them (and any disbenefits the project generates) and are therefore worth considering spending money upon. In terms of transport projects, the BCR is used to measure a project’s “efficiency” – which together with an analysis of “strategic fit” and “effectiveness” determines whether that project should happen or not. BCRs of between 1 and 2 get a “low” ranking, 2-4  for a “medium” and above 4 for a “high”.

To calculate a benefit-cost ratio there are obviously two things you need to know – one is fairly easy, being the costs. The other, the benefits, is much more complex. Economic theory says that the best cost-benefit analyses capture as many costs and benefits relating to an intervention as possible, but when it comes to transport matters things are a bit narrower.

The “Economic Evaluation Manual” – an incredibly long and complex document, is used for this process. The EEM outlines which benefits are relevant for measurement and how one goes about measuring them. The main benefits are typically the following:

  • Travel time savings
  • Vehicle operating cost reductions
  • Safety benefits
  • Travel reliability benefits

For public transport projects, benefits are split into those enjoyed by the PT users themselves and those enjoyed by other people as a result of a PT improvement (people changing mode from driving will mean everyone else can drive a little bit faster). In recent times a lot of thinking has gone into analysing “wider economic benefits” of transport projects – with “agglomeration benefits” (being the benefit arising from economic activity being more closely located) now able to be included in the EEM calculation of any project’s benefit. Agglomeration benefits are usually calculated as a proportion of the travel time savings benefits, with that portion dependent on the type of project being considered.

While a fairly wide range of benefits are outlined above, in the calculation process they are certainly not all considered equally. For most projects, the vast majority of benefit arises in the form of travel time savings – an extrapolation of the old saying “time in money”. A transport project that makes it quicker to get from A to B is said to generate a dollar benefit. This benefit varies depending on whether the trip is for business, commuting or “other” purposes. Add up all the minutes saved, multiply by the dollar amount and you have a project justified.

The problem with this approach, in my opinion, is that it does not properly capture many other benefits and costs. Widening a road to shift traffic faster not only comes at the cost of construction, but also at the cost of a street that’s now probably less friendly for pedestrians and cyclists and has less general amenity. This amenity loss is likely to only show up in analysis of the impact of a project on property values, but that’s not something able to be captured in the evaluation process.

Similarly, a project which slows traffic down to improve things for pedestrians, cyclists and to boost the attractiveness of an area will come out of this process with a negative BCR (not just below 1, but actually below zero) because it slows vehicles down – even if it generates a whole pile of other benefits. This is why NZTA makes no contribution to footpaths, why it is so often extremely difficult to get additional traffic signals put in place for pedestrians and why we end up with horrible roads like Mayoral Drive, Hobson and Nelson streets: because vehicle speed is valued above everything else.

Creating this road would have had a fantastic BCR, but was it worth it?

 Let us think for a minute what the real benefits of something like the London Underground of New York Subway really are. It’s not in the reduction of congestion: the roads are still full of traffic. It’s not in making traffic go faster: as I said, the roads are still full of traffic. But rather, the real benefit of both projects is that they have enabled each city to grow far bigger and far more prosperous than would have ever been possible without that infrastructure being in place. These underground rail systems enable a simply huge number of people to travel around the cities without destroying the fabric and attractiveness of those cities and without requiring utterly incomprehensibly large amount of space for parking.

These are a different kind of transport benefit from what we’ve measured in the past, and really get to the crux of transport being a “means to an ends” rather than an ends in and of itself. While roading projects could very well be measured in the same way, for some reason they’re not – perhaps because they’d perform rather badly in comparison (they require such a huge amount of space for the benefit they bring).

The crux of this issue is that when the government says that various public transport projects don’t “stack up”, it’s largely because they are being assessed against a system that is flawed and misses out so many of the most significant benefits that something like the City Rail Link would bring. Where’s the assessment of the benefit provided by Auckland’s city centre being able to double in employment count? Where’s the assessment of the benefit from not needing to waste so much space on tens of thousands of carparks? Where’s the assessment of the benefit to property values – not just in the city centre, but also along all the rail corridors?

49 comments to Measuring ‘transport benefit’ better

  • Richard D

    The other factor that you don’t mention is the time value of money. This value is a huge factor in determining whether or not schemes have an economic case.

    Currently the NZTA is using 8% as its discount factor in economic evaluations, compared to the UK (say) which uses 2½ – 3½%. The NZTA has a 15 year limit to benefits, whereas the UK uses 30, longer if justifiable – for instance when considering assets that will last 60+ years.

    In effect what the policy is saying is that it is more worthwhile for the government to pay off debt than to invest in a transport scheme that (roughly) has a return of 8% ie a BCR of 1 using the NZTA’s methodology. Given that the yield on NZ Government bonds is under 3% – ie the Government’s cost of borrowing is 3% – that does seem a strange position for the government to hold.

    Crudely –
    Using the NZTA methodology, a scheme with a cost of 8.5 and benefits of 1 per year thereafter willl have a BCR of 1.01 – barely woth doing.
    Using a discount rate of say 6% and a lifetime of benefits of 30 years raises that BCR to 1.38 – reasonably worth doing
    If the bulk of the scheme is for infrastructure that is going to last 60+ years – like say a rail tunnel under the CBD, then it is credible for the lifetime of the benefits to be captures that far out. A rate of 6% over 60 years gives a BCR of 1.6 – maning the scheme worth doing.
    The UK, admittedly with its lower cost of Government borrowing has the same scheme with a BCR of 2.5 – making the scheme very worthwhile doing.

    So whilst capturing the benefits to be included in the analysis is one factor here – the other is getting the analysis methodology altered to stop being a disinsentive to invest in transport.

    • Stu Donovan

      Richard D I’m not sure where you get your numbers from; my understanding is that they are incorrect. The NZTA has a 30 year limit to benefits and accepts longer time periods for some projects. That’s in the EEM and standard practise, as far as I know. The 15 year time limit may be applied to items that depreciate relatively quickly, such as RTI signs and bus shelters, which I think is fair enough.

      In terms of the U.K. I think they have two discount rates. I thought the primary rate was 5% but for marginal projects they recommend a sensitivity test with 3%. If a projects fails with 5% but then subsequently passes with 3% then it may be funded if it delivers strategic benefits. I may be wrong on the U.K. approach because it changes fairly regularly … that’s my understanding at least.

  • And of course crazy little details such as the valuing of a PT users time at 43% of that of a car driver!! And yes I understand the excuse for this, and don’t buy it. What it really comes from is the view, from the types that make this stuff up, that if you’re catching the bus that you aren’t as important someone driving. And remember as Mr A points out above the whole BCR process is heavily weighted towards ‘time savings’, so a PT project has to show time savings for more than twice as many people as a roading one to even get close by this crooked accounting.

    • SteveC

      Patrick, I thought that was fixed some years back, I have a look

    • SteveC

      at 1 Jan 2010, the value of time for a passenger for work purposes across all modes (except for a light commercial vehicle passenger) is consistent at $21.70, compared to a driver at $23.85, so the PT value is 91% of the driving value; commuting it’s 84% if you’re standing and 60% if you’re seated and your 44% is for off-peak non-work travel only

      it would be interesting to consider the proportion of people forecast to make work trips on the CRL during work hours, it could be quicker from Britomart to a meeting on K’Rd than any other mode!

      this info came from Vol 1 of the Economic Evaluation Manual, page A4-2

      • Peter M

        Would be miles faster between Britomart & K Road by train than by taxi/car.

      • That ‘s still all kinds of crazy. I work all hours/ no hours. These math-heads have no way of evaluating the value of someone’s time to themselves or society. Shouldn’t we just assume that all time is of equal worth? Standing/sitting; really?. And certainly, Parnell/ Aotea… Remuera/ Britomart…. GI/Hendo…. Meadowbank/Kingsland…. Britomart/K’Rd… any time of the day… Or how about Middlemore/Grafton: the hospital express…

        • Stu Donovan

          There’s some fundamental difficulties with the value of time – it’s measured as an average when what we are more interested in the VOT for marginal users. So historically, low income people (with low values of time) have tended to use PT more regularly. But is the past indicative of the future? No, not really – when you think of the passengers attracted by Britomart they would tend to be high income works downtown.

          But the horrible implication of this approach is that we should have a higher value of time for rich areas than poor areas. You don’t see that in the EEM because it’s politically unacceptable, so they obfuscate the issue by linking the mode being considered. I tend to agree with you Patrick: We should just use the same rate for everyone, else risk going down a very complex/inequitable path.

          • SteveC

            not convinced Stu, one unexpected outcome of HOT (high occupany/toll) lanes in the States was that it was the lower income people holding down more than one job who used them not the expected “lexus” crowd, thus suggesting that they valued the ability to get to the next job on time (and not get penalised or sacked) more highly than the more highly paid workers

          • Just thinking about what the airport line would do, with the offices of Ernst & Young and the Financial Markets Authority directly above Britomart, both being sources of high-value people routinely travelling around the country, the time value of their being able to walk down to the platform and be at the airport inside 45 minutes (instead of having to allow an hour or more for taxi) would be enormous. That’s very, very valuable off-peak travel that directly improves productivity by providing for more time spent in the office at the Auckland end, in addition to greatly reducing their transactional costs for clients by cutting the cost of travel to/from the airport by 70% or more (even a $10 airport train fare is a fraction the cost of a taxi between the CBD and the airport).

      • conan

        Is there any justification for the percentage splits? They sound a little old school. Yesterday for example I took the train to collect a vehicle for work, and then drove said vehicle back to work. Based on this the train time is less valuable to me than the time driving it back, but on the train I was able to catchup with my emails, make a few calls and generally be productive. In the vehicle I had to drive and was unable to do any of these things. The same is true of commuting in- by the time I’m at my desk in the morning I’ve already read my emails, the news etc and are ready to go. That would not be possible if I drove.

        • I’d really like to know about the justification too.

          I’ve just been thinking about it and I wonder if it is actually designed to capture exactly what conan described? If it is used purely for considering time *savings*, then this would actually make some sense wouldn’t it, since it is the opportunity cost that is important – and because as a passenger or a PT commuter you can multi-task/read emails/read a book etc, hence a lower opportunity cost for the time spent travelling? This is the only way in which I can imagine these numbers making some sense – especially the standing vs sitting one (easier to perform other tasks -> lower opportunity cost). Is that the supposed justification?

          If this is the case, then I would love to know what kind of methods are used to come up with the numbers… And most importantly, whether this valuation is applied consistently – i.e. if someone shifts from driving to PT, does this accrue a monetary benefit in terms of their travel time shifting from high opportunity cost to lower opportunity cost?

          • I can’t help but wonder how much of the valuation is a hangover from even as little as five years ago when very few people were connected to the internet when away from fixed infrastructure. These days it’s unthinkable to many of us to not be “always on”, which changes the value of passenger vs driver quite dramatically, but it’s not terribly long ago that it wasn’t entirely unreasonable to predicate values of transit users as being lower because they were probably not travelling to jobs that paid enough to justify a carpark or, worse, didn’t provide a parking space. That’s all done and dusted these days, but it’s a pretty recent change. For all the talk now about how much work one can do as a passenger on a train or bus, think back not very far and about all you could do was read the paper or a book.

  • Louis M

    I’m with Anderson, we need to rethink our traffic engineering from a focus on making vehicles move fast to moving our vehicles slowly. BCRs are flawed in this respect.

    • …while improving connection and accessibility for goods and people.

    • Peter M

      But cars have feelings too….

      < /channellingministryoftransport>

    • Nick R

      But think of the economic impacts! Everyone knows that people work harder and get paid more if they can drive faster on their trip to work. Plus it’s an indisputable fact that people spend more shopping out of fast moving cars than slow ones…. right?

      • Peter M

        And that people will be more economically productive if we slice 10 minutes off their commute, rather than just ending up with a longer commute over time, or rather than sleeping in a few minutes longer each morning.

      • SteveC

        sadly, I couldn’t track it down when working at Auckland City, but Hamish Nuttall (of Naked Bus) when working for Steer Davies & Gleave carried out a survey of retail spend in Newmarket and analysed it by arrival mode, surprisingly, PT riders spent more per journey than anyone else, he did the same survey for NSCC in Highbury with the same result

  • Hey but it’s not just on the benefit side, what about the costs. Puhoi to Wellsford is going to hack the bejesus out of a whole lot of countryside, some farmland, some wilderness. Fixing the North Auckland Rail Line and taking it to the port will consume no extra land and will keep actual Northlanders in real jobs on the line and at the port. And cost a lot less, and move freight without either adding to or being subject to congestion, or road wear and tear, and save lives. Stick that in your BCR and smoke it….. [Oh wait, I forgot that rail is evil and cannot be thought about].

    • Mr Anderson

      What about the delays during construction. I wonder if those travel time disbenefits are factored into the equation.

      • Stu Donovan

        Yes, the EEM stipulates that they should be considered, although rarely are. In P2W case I’d suspect they’re actually quite small, because of the new alignment the route takes. Delays to traffic would be more significant in a situation where you were widening an existing road.

    • Watcher

      For P2W the hidden costs don’t end at the environmental devastation. There are enormous personal costs being borne by individuals who have been held hostage by this project for the past 2 years and – if Bob Scott’s comments are anything to go by – look like being held hostage for at least another year of their lives. These are the people who have been told that their property is within the planned road designation and also those unfortunates who now find themselves with a fright (sorry Freudian slip – should be freight) motorway planned to be their close neighbour – instead of the beautiful, quiet country outlook that they paid such a lot of money to get. For 2 years these people have held their breath whilst nameless, faceless suits and engineers sat in their ivory towers playing the “where shall we actually put this road” game. For 2 years these people have watched impotently whilst complete strangers decided their future – the stress that this degree of powerlessness engenders is enormous and has told on the health of many along this route. Some have been hospitalised – others fallen victim to stress induced illnesses caused by the lowering of their immune systems – a side effect of trying to manage so much stress. What price do you put on people’s health and happiness?
      People who were once self-sufficient and confident of their futures now face uncertainty. Property values for those along the route whose land is not part of the designation have plummeted – much of the value of country properties lies in the lifestyle and ambience of the property – a motorway sort of majorly intrudes upon this. Most close neighbours of this road will lose approximately 25% of the value of their property – and that’s if they can sell. Typically these sorts of properties won’t sell until the road is built. Many of these properties are lifestyle blocks owned by elderly people who are now seeing their life savings ripped off by a government intent on building this road regardless of the misery that it inflicts on the unwilling victims. For those people who are facing the loss of hundreds of thousands of dollars (and in some cases, if they can’t sell, complete destruction of the value of their property) – the argument that this road is viable because it saves 5 minutes on a journey is mind-numbingly insulting. How many journeys must be made to make up for the millions that people along this route are unwillingly being forced to lose as a result of this road?

      • Ingolfson

        Hi Watcher – that will always be the case for such a big project. If you made the call where a project goes along without any previous consultation and long, semi-public investigation, you might reduce uncertainty, but would then open yourself up to accusations of unnecessary and unfair secrecy, and of rushing the project assessment. So I am afraid property owners near ANY transport project will always face this issue. Damned if you do, damned if you don’t.

        Arguing about “nameless & faceless” people and “complete strangers” is a bit of a cheap shot (no, I am not involved in the project), unless NZTA is actually refusing to engage with the affected people (but “engage” doesn’t mean “stop the project, once we told them we don’t want the project in our backyard”). If you don’t like the whole project, contact your politicians!

        It’s whether the project itself is worth it, and whether the assessments incorporate all benefits and disbenefits fairly is the question. Even something most people here on this blog support 100% like the City Rail Link will have clear negative effects on lots of people, and expose them to lots of uncertainty, so that alone cannot be a reason to not do a transport project.

        • On your last point, not so, it’s underground! Very few impacts for the scale of the project. And my original comparison was with fixing the Rail Line to Northland (remember P2W is all about freight apparently) and there would be no negative land use effects with that project, it’s all on the existing ROW.

        • Watcher

          Not suggesting at all that uncertainty is a reason for stopping a project. Merely pointing out that there are costs to these sorts of projects that, for one reason or another, don’t seem to get the attention that they deserve. There IS a quantifiable cost to sickness – days off work, cost of health care etc, there ARE genuine and quantifiable costs to individuals relating to the impact upon the value of their property. If I read you correctly (and I am sure that you will correct me if I am wrong) these costs are somehow “acceptable” because every project of this nature engenders collateral damage and therefore these costs should not be taken into account when calculating the BCR. To accept that the social cost of a 5 minute shorter journey is valid but that the social cost of people’s health and the damage to their investments is not seems a bit arbitrary and smacks of a selection process designed to evade such negative and troubling issues.
          I don’t care about this road one way or the other – what I do care about is that ALL affected people are treated fairly. That means that there should be a mechanism to compensate all people fairly – not just those whose land is being taken (and even that process, governed by the Public Works Act, is manifestly unfair). And the cost of such treatment should be an input into the BCR – not to do so results in a dishonest evaluation of a project’s worth because so much is being unwillingly contributed in the form of lost savings and wealth by the individuals that collectively become a project’s collateral damage.

  • NCD

    The other area I’d be interested to know is how the methodology assesses the cost of car travel- does it only take the marginal cost, or true cost of ownership? (depreciation, insurance, prangs, pollution- hey: with a good enough CRL people might even take their capital tied up in their 2nd car and do something productive with it!)

    • Stu Donovan

      Good question, from what I know the cost of car travel stipulated in the EEM includes all the costs you mention. Depreciation is particularly important.

      They do not, however, consider the impact of building roads on the demand for parking. In my experience some people within NZTA can’t seem to get their head around the fact that when you build more roads, you need more parking. Even when you mention the universal law of demand they can’t quite seem to grasp the concept, which is rather bizarre.

  • Dave

    Whose car journey is of most value? Note: These characters are probably not fictitious.
    - John and Jane Doe out for a Sunday drive
    - Puffing Billy, driving to the corner dairy for a packet of smokes
    - Frugal Flossie, driving 25Km to save $10 on her grocery bill
    - Silly Sally, dropping her kids off at the school gate in a 4WD
    - Freddie Freighter, hauling produce from one end of the country to the other, and passing his mate doing the same in reverse.
    - Salesman slick, must hit the road quick, or lose the sale to Dick
    - Carlos commuter, at a loss without his car.

    • Stu Donovan

      In my (unscientific) order of most to least valuable:

      Freddie Freighter
      Carlos Commuter
      Salesman slick
      John and Jane (I think a lot of people value their Sunday drivers quite highly, especially when they’re visiting Nana)
      Puffing Billy
      Frugal Flossie
      Silly Sally

      What do you reckon?

  • Kent Lundberg

    “why we end up with horrible roads like Mayoral Drive, Hobson and Nelson streets”

    Quick search of these stroads= 3km and about 3 streetside cafes including, the “Carpark Cafe” on Nelson St. Love the place value.

    • I think Mayoral could be a blessing in disguise, or at least we can make the best of a bad situation with it. It allows us to dedicate a corridor to traffic between the motorway ramps at Cook St and Wellesley, such that the nearby corridors can be dedicated to people and public transport. Plus the severance isn’t *that* bad, and building in frontage around the Aotea Square section could do wonders.

      • Stu Donovan

        The voice of genuine reasons and optimism! Vote Kent out, Nick for Mayor!

      • conan

        It isn’t that bad, but the eastern side intersection with Vincent St needs to lose the high speed slip lanes. They just aren’t friends with pedestrians.

        • No conan it is appalling, the old street pattern was great and so much built heritage was lost for that senselessly curving aberration. Especially as we are still waiting for the dividend; the cars out of the Queen St valley. But as Nick says we can improve things from here a great deal…. including getting cars out of Queen.

          • conan

            I was agreeing more with Nick’s general comments, rather than saying it’s a great road- in that it isn’t that bad if what he says comes to pass. Isn’t that clear from my sentence without any of that in there??

  • Malcolm M

    The Economic Evaluation Manual could actually be quite supportive of the CRL case if it were redone using more recent data, and probably double its BCR. The previous case was done before the trends in PT usage became accepted by planning professionals, and before many of the higher-income drivers started moving into the PT mode. The key numbers that would change are
    1. The future growth rate of PT, which if projected over the next 30 years (as is done for road cases) would lead to much higher overall PT use.
    2. The value placed on the time of PT users (driving commuter’s time being 60% more valuable than those sitting in a train or bus). The values in the manual are likely to have been based on surveys of users in each group asking how much they would be prepared to pay for a faster journey. At the time of the survey (probably in the 1990′s) those on PT would have tended to have lower incomes. Now more higher income people have moved into this category, and preparedness to pay would be greater. Survey methods have probably also advanced. The earlier studies probably didn’t ask what expenditure would be foregone for the faster journey. When faced with an actual decision about paying for a faster journey, about half the traffic disappears, as has occurred in Australia when toll roads initially opened free, then a toll was applied.

    • Am still outraged by idea that a driver’s time is inherently more valuable than anyone else’s… all of society is in both groups, do I have to be more specific? Frankly this idea is offensive.

      Also there is a circular issue here. We know that if built the CRL will lift, in a step-change kind of way, the numbers of rail and PT users. Why? look at what Britomart did, look at Perth, look at Vancouver. We know, without any doubt, that ‘build it and they will come’ works with this kind of project here and now in Auckland. So what ever numbers you want you can put into the calculations, the numbers you choose will simply reflect whether you want the project or not. This is what the MoT did when they looked at the CRL under Joyce. They made up low numbers of users, and imagined limitless constraints on buses and cars into the city, as well as a relatively underperforming city in general.

      Assumptions leads to results, every time. Crap in- crap out.

      • Mr Anderson

        Yeah apparently there were so many people on each bus in the MoT scenario they’d be clambering on the roof!

      • Glen K

        It’s not that the driver’s time is more valuable; it’s that they can’t do much else with that time (unless they have a hands-free phone perhaps). If I’m a passenger in a car/bus/train and I have the right equipment I can check my emails, make calls, read something, etc. If I am walking or cycling it is less time that I need to spend going separately to the gym or some other exercise/fitness activity. So my time travelling via these modes is not as “wasted” compared with if I have to concentrate on getting from A to B safely. So if I save some time for a driving trip then maybe that person can now put that extra time to good use (yes, this assumes that they don’t just drive further), whereas if I save travel time for a passenger or active traveller they may still end up spending that extra time doing the same secondary activity anyway.

        • conan

          Nice thought, though I doubt that is the case. Travel time is thought of as a cost, and according to the referenced document:

          People that change modes do not always consider additional travel time as a cost.
          The value that people assign to travel time is highly variable, depending on factors
          such as comfort and enjoyment. For example, some people prefer public transport
          or rideshare travel as being less stressful than driving in traffic. Other people enjoy
          walking or cycling for recreation and exercise, and will choose these modes even if
          the trips take longer. In other words, consumers sometimes consider time spent
          travelling by alternative modes to have a lower cost per minute than driving.

          Therefore they are basically saying people who travel on public transport don’t value their time as much as those who drive (because we all know it is always the quickest method of travel isn’t it- even though I can get to work twice as quickly on bike and the same by bus as drive/park/walk). I think therefore it is unlikely that their calculations reduce the cost of travel on PT because it is more productive.

  • Malcolm M

    The Economic Evaluation Manual doesn’t cite any source for the table of relative time values, whereby a car driver ‘s time is 60% more valuable than someone sitting on a train or bus. It could be (i) the collective opinion of a group of road engineers, (ii) surveys of what people say what price they would pay (but without following through whether that’s what they would really pay), or (iii) a study of actual spending behaviors. The fact that there is no source cited suggests it’s dodgy, and more likely to be one of the first 2 options. If the study were done more than 10 years ago, it would also be of dubious value because of the massive changes in PT ridership worldwide, and the availability of portable information devices, which no doubt have affected the demographics of those using PT.

    Such a dodgy table is hardly a strong foundation to calculate a BCR for the CRL. Julie could have fun asking questions about it in parliament.

    • The perversity is that it is based on the value of time *savings*.

      Because a car driver is all but useless while driving, saving them time is valuable because it allows them to spend more time outside the car being useful. On the other hand transit user isn’t occupied with driving a car, so they can do things like read the paper or write emails while travelling. This means they were already being useful while travelling, so reducing the time they spend travelling isn’t as valuable as if they couldn’t do anything like the drivers. That’s how the “logic” goes anyway.

      The really sad thing is it ends up justifying projects that lead to more people travelling where they can’t be productive, all based on the idea that there is a fixed travel demand out there so more roads means the same amount of driving done in less congestion.

      • Kent Lundberg

        Nick, Is there any reference of countries, states or cities that have just given up on the idiocy of valuing time *savings*. I know Vancouver just said no to motorways entering the city,…

  • Malcolm M

    There’s a good chapter about valuing travel time from the Victoria Transport Policy Institute (Vancouver) at http://www.vtpi.org/tca/
    Click the “Travel time” section on the second screen down the page. The valuations for bus vs car driver in the NZ EEM are consistent with some other international highway BCR literature. None of the references seemed to link back to published experimental studies, so it could be the blind leading the blind. A Brisbane study showed a value for car drivers only about 15% higher than for bus passengers, and in some cases the bus passengers had a higher value than car drivers. Unpleasant PT conditions have a higher time-cost value than pleasant driving conditions.

    Todd Littman of the Victoria Transport Policy Institute says about improving the quality of the PT experience (http://www.vtpi.org/quality.pdf)

    “Conventional transport project evaluation models generally apply a single value to all
    travel time, or a few values that reflect type of trip (commercial or personal) and traveler
    (driver or passenger), without adjustments for travel convenience and comfort (USDOT,
    1997). They therefore tend to undervalue qualitative improvements to alternative modes.
    This tends to undervalue many types of improvements (those that increase travel
    convenience and comfort, rather than speed) and skews planning decisions to favor
    automobile-oriented improvements over alternative modes.”

    So making PT conditions more pleasant, such as better bus stop or station waiting facilities, can lead to mode shift even if there are no travel time improvements. Interesting his point about the time values in conventional BCRs skewing results in favour of car-based solutions.

  • KLK

    I can actually provide first hand experience on this, from a KL perspective.

    When I travel for business, I fly Malaysian Airlines from the international terminal, which is connected to central station by an express train. Door to door in 28mins for NZ14, working away on wifi, and once at the airport its two escalators up and I’m at the check in counters. And most likely, if I took the train more than 2hrs before flight departure, I checked my bag into the check-in counter back at the station – so no check-in luggage to carry until I land at my destination.

    Now if I go on short holidays in the region, I usually take Air Asia from the low cost terminal (cheaper flights). No train (not til 2014). So its a bus (about 1hr for NZD4 – even at the price, no thanks). Or a taxi – 45mins for NZD30. But for both there is traffic, the impact of weather (slow going in storms), no wi-fi, stop-start-stop-start….and thats when I am a tourist. I know companies who only fly Air Asia because of cost savings. If I had to for work, it would be dreadful on all fronts – cost, time, being work-unfriendly (no wifi)…just overall worse.

    I have colleagues in China who do the Beijing-Shanghai route regularly and have ditched the plane for the fast-train, even though the latter takes longer overall. Reason? The ability to work on the train. Wharever they lose out to the plane in the air, they get back – and more – thanks to wifi.

    I still think the “Airport Line” idea needs a rebranding to indicate its real advantage. People think its for tourists/flyers and write it off as fanciful. While they heavily underestimate potential airport users (the airport has $12m trip pass through it annually afterall – even 5% of that market is a lot) its the linking of the two biggest employment hubs in the region, and everything in between (through 4 new stations), thats the selling point.

    Nonetheless, time savings for business people – and workers – from such a line – would be huge, as well as being a far more pleasurable experience (if you can put a value on that)…

  • KLK

    That post above was supposed to be in response to Matt Clouds: re the Ernst & Young/Financial markets Authority people and the time savings from a line between Britomart and the airport.

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