What does the quantum of working from home do to the value of commuting time used in transport appraisal?

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David A. HensherMatthew J.Beck CamilaBalbontin

Abstract

The need to recognise and account for the influence of working from home on commuting activity has never been so real as a result of the COVID-19 pandemic. Given a recognition that WFH activity during the pandemic has reduced the amount of commuting activity compared to pre-COVID-19, the inevitable question is raised as to what this might mean for some of the crucial inputs in the appraisal of transport initiatives. One critical value used in benefit-cost analysis is the value of time which converts time into monetary units in the calculation of user benefits. We are interested in whether reduced commuting activity is associated with higher or lower willing to pay to save time. We investigate this possibility with data from the Greater Sydney Metropolitan Area in late 2020 when working from home was at a high level. The findings of a higher average commuter VoT have major implications for the VoT used in transport appraisal given that time savings are the largest user benefit. We suggest a percentage adjustment required to align with the ‘new normal’ as currently known.

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