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Center Identification Number:  77921 

Project Title: How People Spend to Save Time

Principal Investigator:

Victoria A. Perk, Senior Research Associate
Phone: 813-974-7327

Center for Urban Transportation Research
University of South Florida
Fax: 813-974-5168

External Project Contact:     

Amy Datz
Florida Department of Transportation Project Manager
(850) 414-4239

Start and End Dates

Expected Start Date: March 2010                 Expected End Date: August 2011

I.  Project Objective/Problem Statement

Estimates of value of travel time savings (VTTS) are important elements in benefit-cost analyses of transportation projects. Additionally, differences in VTTS among transportation modes and among the residential collection, line haul, and distribution portions of the commute provide information to planners and others on the likely success of diverting trips from single-occupant vehicles to alternatives.

One criticism of current measurements of VTTS is the reporting of average values for entire populations or very large subgroups of travelers. According to a current research needs statement from Transportation Research Board (TRB) Committee ABE20 (Transportation Economics), while the use of average values of VTTS is straightforward and relatively simple, it assumes a normal distribution when the true distribution is likely skewed. If the true VTTS distribution is skewed, the traffic redistribution and revenue outcomes of pricing measures will be incorrectly estimated. The research needs statement also notes that there is evidence that individual VTTS varies considerably for the same individual on different occasions. This can be seen in the use patterns of optional toll facilities where the same people make different route choices on different days.

In addition to demographics, individual VTTS can depend on trip purpose, amount of time saved per trip, who is paying (the traveler or the employer), and the possibility of engaging in other productive or enjoyable activities while traveling. Clearly, there are quality of life issues related to individual measurements of VTTS.

There is a need to improve the theory leading to the correct measures of VTTS and improve its estimation. In challenging the prevailing way VTTS is measured, and in proposing a new way, it is critical to understand the theoretical foundations of current VTTS measurements. Improved measures of VTTS will only be achieved by improving the underlying theory. As such, part of this work will necessarily address the theoretical issues identified above.

This proposed work draws on two important results from urban economics. It has been shown both theoretically and empirically that an increase in distance between the residence of CBD-employed workers and the CBD reduces housing expenditure by exactly the amount that it increases commuting cost (DeSalvo, 1977a; Mills and Hamilton, 1994, pp. 109–112, 132). Similarly, it has been shown both theoretically and empirically that the incomes of suburban workers fall with distance from the CBD by an amount exactly equal to the saving on commuting cost due to suburban vs. CBD employment (DeSalvo, 1977b; Mills and Hamilton, 1994, pp. 117–121, 134). These results illustrate the trade-offs that individuals must make in deciding where to live, where to work, and how to travel between home and work. We propose to estimate VTTS based on this economic theory using actual market data (observed data and revealed preference) rather than the typical approach using stated preference survey data, which we believe will lead to more accurate results.

By better understanding the market and the distribution of VTTS, decision-makers will be able to more accurately estimate traffic and revenue impacts of various transportation projects, including managed lanes. This research would be beneficial for areas with existing or planned managed lane projects located around the country and, in particular, Florida (with data collection occurring in South Florida).

II.  Objectives/Tasks

The objectives of this study are to improve the theory leading to the correct measure of value of travel time saving (VTTS) and to improve the estimation of VTTS. An additional objective is to synthesize and provide additional information on the usage of the managed lanes in South Florida. The following tasks have been designed to accomplish these objectives:

Task 1. Progress Reports/Project Management – This task will cover project management at CUTR including producing required progress reports and carrying out deliverable reviews before submittal to FDOT.

Task 2. Summary of Literature – This research begins where a NCTR synthesis on VTTS literature ends (Concas and Kolpakov, 2009). Some theoretical assumptions used in previous research can be challenged, including: a minimum travel time constraint (DeSerpa, 1971; Evans, 1972), a minimum consumption constraint (Evans, 1972; Jara-Díaz, 2003), and effective leisure time (Train and McFadden, 1978; Small, 1992). Huq (2007) critiqued these assumptions, proposing an alternative market-based estimation approach, which we propose to apply, that avoids these criticisms. Also, this research will build upon Coulson’s work (1991) on what is known as the monocentric model in urban economic theory and Timothy and Wheaton’s work (2001) on wages, employment location, and commute times. In this task, previous literature will be synthesized and additional literature will be compiled and reviewed.

Task 3. Data Assembly – This task will determine the data to be used in this project. Prior to the start of this project, it is not known what data will be available. Effort in this task will include an investigation of market data available from the managed lane project in South Florida. Use of market data (i.e., actual data from usage of the lanes, or existing data from previously conducted revealed preference surveys) is preferred to using existing stated preference survey results or conducting any additional surveys. The advantage of market data is that it provides information on actual behavior that has already occurred. Available data will determine additional data collection efforts that are required for this project, and will also influence the exact methodology to be used for the analysis. Once data are identified, they will be compiled and assembled for analysis.

Task 4. Deliverable, Tasks 2 – 3 – This task will culminate in a document summarizing the efforts and findings of Tasks 2 and 3.

Based on the results of Task 3, a modification to Task 5 may be required. If suitable data are found in Task 3, there will be no need to modify Task 5. If suitable data are not found, it is proposed that remaining effort from Task 3 (originally allocated for assembling existing data into a usable format) be re-allocated to collecting new data via a survey effort in Task 5. The level of effort for assembling existing data for use in this project is expected to be comparable to conducting a survey to precisely collect the necessary data. No other modifications to the work scope will be necessary. The methodology developed in Task 5 will be dependent upon the type of data found/collected, and not on how the data are collected (i.e., existing data vs. survey data).

Task 5. Develop Methodology – Based, in part, on the results of Task 2, this task will determine the most appropriate method for analyzing the data obtained in Task 3. The methodology will be designed to provide improved empirical estimates of VTTS and will attempt to address criticisms of previous measurements of VTTS, as noted in the Background Statement and Task 2.

This task will also identify a brief list of additional qualitative research questions to be analyzed in Task 7. These questions will originate from FDOT staff, CUTR staff, or others in the industry, and will also be based on available data and information found in Task 2.

Task 6. Data Analysis – In this task, an analysis will be conducted using the data identified and assembled in Task 3 and the methodology developed in Task 5. Econometric techniques will be applied using statistical software such as SPSS and/or STATA. The results will include a model that provides empirical estimates of VTTS that are based on the usage of managed lanes, but can also have other applications (including, but not limited to, mode choice applications and alternatives analyses for transit projects). The results of this analysis will be improved measures of VTTS over previous work.

Task 7. Synthesis on Usage and Performance of Managed Lanes – This task will address various qualitative research questions, previously identified in Task 5, related to the usage and performance of the existing managed lanes in South Florida. In addition, experiences in similar projects around the U.S. will be synthesized. It is anticipated that the majority of the effort in this task will be achieved using data collected in Task 3. Contacts will be made to other agencies around the U.S. and/or in Florida to collect information. As the project is ongoing, modifications may be made to the research questions by FDOT staff or CUTR staff. Any modifications will be subject to data availability.

Task 8. Final Report – In this task the project’s final report will be produced, including documentation of all project tasks, development of a draft report, and revisions of the draft report. The draft final report would be reviewed internally within CUTR before it is submitted to FDOT for its review. FDOT’s comments on the submitted draft final report would be the basis for developing the final report. Due to the technical nature of the project results (particularly from Tasks 5 and 6), it is anticipated that there will be outside reviews of the draft report.

Work not included in this scope of service is not to be performed and will not be subject to compensation by the Department.

Victoria Perk will be the principal investigator for the project. Ms. Perk will direct and participate in all tasks of the research effort and take responsibility for the deliverables. Professor Joseph DeSalvo of the USF Economics Department will serve as Co-Principal Investigator and will participate primarily in Tasks 5 and 6. CUTR faculty member Xuehao Chu will also be involved in research for this project, and is anticipated to participate primarily in Tasks 5, 6, and 8.

III. Deliverables

Project Kick-off Meeting – A kick-off meeting shall be scheduled to occur within the first 30 days of execution by the university. The preferred method for the kick-off meeting is via teleconference or video conference. As a minimum, the project manager and the principal investigator will attend. The Research Center staff must be advised of the meeting and given the option to attend. Other parties may be invited, as appropriate. The subject of the meeting will be to review and discuss the project’s tasks, schedule, milestones, deliverables, reporting requirements, and deployment plan. A summary of the kick-off meeting shall be included in the first progress report.

Progress Reports – The Principal Investigator (university) will submit quarterly progress reports to the Research Center. The first report will cover the activity that occurred in the 90 days following the issuance of the Task Work Order.

Reports should be submitted within 30 days of the end of the reporting period. Reports are due even if little or no progress has occurred (in which case, the report should explain delays and/or lack of progress). Progress reports should be sent in MS Word to Sandra Bell, .

Progress reports must include the following information:

1. Contract Number, Task Work Order Number, and Title
2. Work performed during the period being reported
3. Work to be performed in the following period
4. Anticipated modifications (i.e., to funding, schedule, or scope). This section is for reporting/informational purposes, not for officially requesting an amendment. Note: To request an amendment to a contract, the contractor must provide the project manager with the appropriate information (i.e., what is being requested with justification) in the required format. If the project manager concurs with the request, he/she shall forward it with his/her approval and commentary, as appropriate, to the Research Center for administrative review and processing (pending available funds, etc.)
5. A Progress Schedule (figures A, B, and C) updated to reflect activities for the period being reported.

Failure to submit progress reports in a timely manner may result in termination of the work order.

Interim Deliverable – One interim deliverable will be prepared summarizing the work performed in Tasks 2 and 3 (to be submitted within 15 working days of the end of Task 3). The interim deliverable shall be submitted to Sandra Bell electronically in MS Word at In addition, one double-sided hard copy of the interim deliverable shall also be submitted to Sandra Bell (The Florida Department of Transportation, Research Center, MS 30, 605 Suwannee Street, Tallahassee, FL 32399-0450).

Draft Final Reports – The draft final report is due 90 days prior to the end date of the task work order. The draft final report will be submitted electronically to Sandra Bell, In addition, one double-sided hard copy of the draft final report shall also be submitted to Sandra Bell (The Florida Department of Transportation, Research Center, MS 30, 605 Suwannee Street, Tallahassee, FL 32399-0450). It should be edited for technical accuracy, grammar, clarity, organization, and format prior to submission to the Department for technical approval. The Research Center expects contractors to be able to provide well-written, high-quality reports that address the objectives defined by the scope of service. Draft final reports must be prepared in accordance with the Guidelines for Preparing Draft Final and Final Reports posted at ( This document provides information on all report requirements, including format requirements, the technical report documentation form, disclaimer language, and so forth.

The project manager will have 30 days to review the draft final report. The 30-day period will begin upon receipt of the draft final report by the project manager.

Final Reports – Once the draft final report has been approved, the university shall prepare the final report. The university will deliver a minimum eight (8) copies of the final report in MS Word on CD or DVD. The CDs/DVDs should be labeled in a professional manner and include at a minimum the contract number, task work order number, project title, and date. In addition, two bound double-sided color copies will also be provided.

The final report is due no later than the end date of the task work order and should be delivered to the following address:

The Florida Department of Transportation
Research Center, MS 30
605 Suwannee Street
Tallahassee, FL 32399-0450

          IV.  Project Schedule

                It is anticipated that the project will be completed within 18 months.

V.  Project Budget

Fixed Price Subtotal                                             90,808.92

Indirect Cost (fixed price subtotal x 10%)           9,080.89

Total Fixed Price Amount                                   99,889.81

VI. Use of Graduate Student(s) and Other Research Assistants

Use of a graduate student will be critical to this project.  The student will need to have experience in conducting literature searches, and must have experience in using Microsoft Word and Excel.  The student should also be capable of performing simple statistical analysis including data frequencies and cross-tabulations in a statistical package such as SPSS.  In addition, the student should also have excellent communication skills and exhibit a professional demeanor.  The student will support the literature review (Task 2), data assembly (Task 3), data analysis (Task 6), the synthesis on usage/performance of managed lanes (Task 7), and documentation of the research.      

VII. Equipment

No equipment is expected for conducting the proposed research.

VIII. Travel

All travel shall be in accordance with Section 112.061, Florida Statutes. FDOT employees may not travel on research contracts.  No travel is planned.

National Center for Transit Research · at the Center For Urban Transportation Research · University of South Florida · 4202 E. Fowler Ave., CUT100 · Tampa, FL 33620-5375 · (813) 974-3120 · (813) 974-5168 · · Comments: