Estimating the value of time is of considerable interest to transportation professionals charged with evaluating infrastructure investments. Two approaches used to calculate the value of time are the microeconomic utility theory approach and the structural equations modeling method. In an effort to clarify the interpretation and the relationship between the values of time derived from these two approaches, both models were applied to a synthesized data set of one-person, one-worker households created by merging records from the 2008 American Time Use Survey data set with records from the 2008 Consumer Expenditure Survey data set of the United States. The microeconomic model results show that people in the sample data set work until the marginal utility of work is nearly zero. This finding implies that the value of leisure is nearly equal to the wage rate. Comparisons of model parameter estimates between the microeconomic model and the structural equations model suggest that the models offer vastly different measures of the value of leisure. Although the microeconomic model offers a utilitarian measure suitable for computing user benefits, the structural equations model provides a much smaller value of leisure, implying that it is a measure of the willingness to pay as represented by the average relationship between monetary expenditure and time allocation.
ASJC Scopus subject areas
- Civil and Structural Engineering
- Mechanical Engineering