Passenger Value of Time, Benefit-Cost Analysis and Airport Capital Investment Decisions, Volume 2: Final Report (2015)

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. C. D. Mote, Jr., is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Victor J. Dzau is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. Mote, Jr., are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transporta- tion Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individu- als interested in the development of transportation. www.TRB.org www.national-academies.org

ACKNOWLEDGEMENTS In addition to the Research Team principals noted on the cover, we want to acknowledge the staff of Economic Development Research Group, Inc. (EDR Group), Resource Systems Group, Inc. (RSG), Unison Consulting, Inc. and HDR, Inc. who contributed to the research, analysis and writing for this report. This includes, Glen Weisbrod, Joseph Langlitz, Julie Ervin, Susan Jones Moses, Dr. Stephen Fitzroy, Adam Winston and Brett Piercy of EDR Group, Inc.; Mark Fowler, Dr. Nikhil Sikka, Dr. Stephane Hess, Jeff Keller and Elizabeth Green of RSG; Donald Arthur, Korey Campbell, Brian Drake and Barry Molar of Unison Consulting; and Melissa Pumphrey of HDR. i

TABLE OF CONTENTS Acknowledgements ................................................................................................................ i 1 Introduction .................................................................................................................... 1 1.1 Value of Time ............................................................................................................................ 2 1.2 Research Approach ................................................................................................................... 6 1.3 Guidebook ............................................................................................................................... 11 1.4 Future Research ...................................................................................................................... 12 1.5 Organization of the Final Report............................................................................................. 12 2 Defining the Components of Value of Time .................................................................... 14 2.1 Theory of Value of Time .......................................................................................................... 14 2.2 Theory of Value of Reliability .................................................................................................. 16 2.3 Valuation of Individual Components of Time in Air Travel ..................................................... 24 2.4 Productive Use of Time Spent in Travel .................................................................................. 28 2.5 Other Considerations .............................................................................................................. 29 2.6 Implications for Measurement ............................................................................................... 30 2.7 Recent Empirical Studies of Air Traveler Values of Time ........................................................ 31 3 Data Collection and Modeling Results ............................................................................ 34 3.1 Survey Questionnaire.............................................................................................................. 35 3.2 Survey Administration ............................................................................................................ 49 3.3 Survey Results ......................................................................................................................... 51 3.4 Model Estimation .................................................................................................................... 65 3.5 Values of Time ......................................................................................................................... 78 3.6 Additional Research ................................................................................................................ 80 3.7 Summary and Conclusions ...................................................................................................... 91 4 Future Research Directions ............................................................................................ 95 4.1 Research Conducted ............................................................................................................... 96 4.2 Recommendations for Future Research ................................................................................. 97 5 Conclusions................................................................................................................... 102 5.1 Follow-on Research ............................................................................................................... 103 6 References .................................................................................................................... 104 Appendix A: Background Research and Appendix B: Stated Preference Survey are in ACRP Web-Only Document 22: Passenger Value of Time, Benefit-Cost Analysis, and Airport Capital Investment Decisions, Volume 3, available at www.trb.org/Main/Blurbs/172474.aspx. ii

LIST OF TABLES Table 1. U.S. DOT Guidance on Passenger Value of Time for Air and High Speed Rail Travel by Trip Purpose ................................................................................................... 2 Table 2. Capital Facilities that Affect the Time Spent in Specific Air Passenger Activities ............ 5 Table 3. Data Collection Summary ............................................................................................... 11 Table 4. Correspondence of Report Chapters and Appendices and Research Tasks ................... 13 Table 5: Major combinations of time components for measuring values of time and reliability. ...................................................................................................................... 30 Table 6. Stated Preference Attribute Levels– Flight Itinerary Choice Experiments .................... 43 Table 7. Stated Preference Attribute Levels – Airport Time Components Choice Experiments ................................................................................................................. 48 Table 8. Data Collection Summary ............................................................................................... 50 Table 9. Traveler Market Segments ............................................................................................. 51 Table 10. Comparison of Top 5 Origin Airports with DB1B Data ................................................. 55 Table 11. Comparison of Top 5 Destination Airports with DB1B Data ........................................ 55 Table 12. Reported Access Mode by Market Segment (Multiple Responses were Allowed) ....................................................................................................................... 56 Table 13. Ground Access Time and Ground Access Distance by Market Segment ..................... 57 Table 14. Respondents’ Airline Preference .................................................................................. 62 Table 15. MNL Model Results – Flight Itinerary SP Experiments (Business Trips) ...................... 71 Table 16. MNL Model Results – Flight Itinerary SP Experiments (Leisure Trips) ......................... 72 Table 17. MNL Model Results – Airport Time Components SP Experiments (Business Trips) ............................................................................................................................. 73 Table 18. MNL Model Results – Airport Time Components SP Experiments (Leisure Trips) ............................................................................................................................. 74 Table 19. MNL Model Results with Individual Income – Flight Itinerary SP Experiments (Business Trips) ............................................................................................................ 75 Table 20. MNL Model Results with Individual Income – Flight Itinerary SP Experiments (Leisure Trips) ............................................................................................................... 76 Table 21. MNL Model Results with Individual Income – Airport Time Components SP Experiments (Business Trips) ....................................................................................... 77 Table 22. MNL Model Results with Individual Income – Airport Time Components SP Experiments (Leisure Trips) .......................................................................................... 78 Table 23. Willingness-to-pay Values (in $/hour) – Business and Leisure Travelers .................... 79 Table 24. Willingness-to-pay Values (in $/hour) by Income – Business Travelers ...................... 80 Table 25. Willingness-to-pay Values (in $/hour) by Income – Leisure Travelers ........................ 80 Table 26. Comparison of Ground Access WTP Values from SP Survey Experiments to U.S. DOT Surface Transportation Value of Time Guidance ................................................. 90 iii