Value of Travel Time Reliability

Synthesis Report &

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Workshop Working Paper

Prepared for:

SHRP 2 Workshop on the Value of Travel Time Reliability

Prepared by:

Cambridge Systematics
ICF International

April 26, 2012

Executive Summary

To support the SHRP2 Value of Travel Time Reliability Workshop, many national and international
research papers were reviewed and synthesized. These documents demonstrate the rich
intellectual dialogue and analytical rigor developing around the topic of how to value travel time
reliability when making transportation investment decisions. The topic is timely. Transportation
agencies across the country are trying to make maximum use of their limited revenues. Evaluating
the trade-offs between operational and capacity improvements is an increasingly important part of
the plan, program and project decision making processes. Understanding how users of the system -- both passenger and freight --- consider travel time reliability is an important element of evaluating
that trade-off.

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This pre-workshop synthesis was undertaken with two primary objectives: 1) to identify what
concepts and analytical techniques related to the value of travel time reliability are ready to be
moved into application; and 2) what topics or areas have gaps in knowledge that need further
exploration through research, pilot projects or other methods before broad application is advisable.
This synthesis supports the following findings:

Travel time reliability has been defined in a variety of ways, most of them closely related.
Two concepts have emerged: (1) reliability as the variability in travel times and (2)
reliability as the proportion of successes or failures against a pre-established threshold
travel time, e.g., on-time arrivals compared to a schedule. Regardless of the definition used,
both concepts can be explained in terms of the travel time distribution.
Two approaches have been used in past studies to define reliability for valuation studies:

Past studies of reliability valuation start with defining reliability, then determining how
travelers value the components of travel time.

Schedule Delay which focuses on the magnitude of the time embodied by both
early and late arrivals in relation to a pre-determined schedule

Mean-variance which uses statistical measures to separate out the value of

typical/usual travel time (VOT; the mean or other measure of central tendency) and
the value of reliability (VOR; measures for the dispersion of the travel time
distribution, such as the standard deviation)

The mean-variance approach is easy to implement in existing analysis frameworks.

However, there is concern that the mean value may include a portion of the reliability
component, leading to double counting of benefits when analyzing an improvement.
Several researchers have indicated their preference for the schedule delay approach on
conceptual grounds, but it is difficult to implement for the highway mode where travelers
schedules are not known and would vary widely if they were.

Three methods have been used to determine the value of time (VOT) and (VOR) analytically:

Options theoretic approach where the reliability is considered to be a sort of

insurance, represented by a reduced, guaranteed speed that motorists would be
willing to accept in exchange for insurance that speeds would never fall below the
guaranteed value. Instead of paying the premium with money, the premium is paid
in the form of travel time

Studies estimating the VOR are not as plentiful as studies estimating the value of time VOT.
Although there is still not a unanimous concession on the VOT, there is a long history using
it in economic evaluations.

Revealed preference surveys where actual travel behavior is observed and related
to field measurements of travel time

The Reliability Ratio, the ratio of the VOR divided by the VOT, is a convenient way of
estimating the VOR for economic evaluations. If the Reliability Ratio can be established
beforehand and the VOT is known, VOR can be computed.

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Stated preference surveys where respondents are asked to explain their current
traveler behavior and/or how they would react to hypothetical travel situations

Past studies of reliability valuation for passenger travel have found a wide range of values,
but the more recent studies appear to be coalescing around a Reliability Ratio of 1.0.

Many non-U.S. countries have undertaken their own review of reliability valuation and have
recommended specific values for VOR and/or the Reliability Ratio for use in economic
analyses:
o

New Zealand: Reliability Ratio of 0.8 for personal autos

Netherlands: Reliability Ratios of 0.8 and 1.4 for personal auto and public transit,
respectively. (Being updated; United Kingdom may adopt the updated number)

o
o

Sweden: Reliability Ratio of 0.9 for all trip types

Canada: Transport Canada study recommended a Reliability Ratio of 1.0

Use of a single (composite) Reliability Ratio in technical analyses may be misleading.

Researchers have noted that just as for the VOT, the VOR can vary by a number of factors.
SHRP 2 Projects C04 and L04 derived an expansive set of Reliability Ratios for combinations
of trip type, income, and trip length. In general, the influence of these factors are:

Australia: Reliability Ratio of 1.3 for personal autos

Trip type the Reliability Ratio for the trip to work is higher than the trip from work
or non-work trips
Income for the work trip, lower income groups have a higher Reliability Ratio
(presumably because their work schedules are more rigidly fixed by employers)

Trip length for the work trip, the Reliability Ratio decreases with trip distance
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Studies of how freight users value reliability are not as plentiful as for passenger travel.
Some evidence exists that both the VOR and Reliability Ratio is higher than for passenger
travel, but these values are highly dependent on the type of commodity.
A framework for applying reliability valuation in economic analyses requires:
o

o
o

A measure for travel time reliability. Although several measures are available,
analysts will be confined to the ones used in the studies that establish the value of
reliability
A value for reliability

A method for predicting future reliability that is also sensitive to the changes in
reliability due to an improvement. Currently, several options are available for
reliability prediction and SHRP 2 Projects L04, L08, C10A, and C10B will provide
additional methods

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This paper and its associated appendices provide the discussion and analysis to support these
findings. The final section, Workshop Next Steps, summarizes the authors thoughts on topics and
issues that are ripe for discussion during the Value of Travel Time Reliability Workshop.

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1. Introduction
1.1 Purpose
The purpose of this synthesis is to provide a starting point for discussing how travel time reliability
should be valued for use in economic analysis of transportation investments and in the modeling of
traveler behavior, as well as to demonstrate that reliability is a separate category of user benefits
that should be included in assessments of transportation projects. The ultimate goal of this work is
to improve from the practitioners point of view the use of travel time reliability in the standard
practices used by transportation agencies.

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The valuation of reliability implies that transportation agencies create more value than they
have traditionally realized when they invest to reduce congestion. Usually, only the value of
time saved is used in calculating benefits. If there is a benefit from the value of reliability, which is
additive, then investments have been undervalued. The value of reliability is most apparent for
traffic operations strategies that directly address the disruptions that cause unreliable travel.
The synthesis covers the following topics:

Theoretical considerations for the value of reliability

Use cases (applications) that could utilize the value of reliability
Summary of past research on the value of reliability
A proposed framework for integrating travel time reliability into transportation analyses
that make economic assessments

1.2 Travel Time Reliability: Concepts and Measurement

Definitions of Reliability

It is important for practitioners to understand the how researchers have defined reliability as they
have developed the theoretical underpinning for analyzing the value of travel time reliability.
Travel time reliability has been defined in a variety of ways by different agencies and researchers
over the years. A review of several SHRP 2 projects, some completed, some still underway, was
conducted to identify how they defined reliability. Table 1 is a summary of those definitions. A more
complete discussion of the definitions from these reports can be found in Appendix A.

Table 1. Reliability Definitions

Study/Organization
F-SHRP Reliability Research Program

Definition of Reliability
travel-time reliability can be defined in terms of
how travel times vary over time (e.g., hour-tohour, day-to-day).
reliability is based on the notion of a probability
or the occurrence of failure [F]ailure is defined in
terms of how many times the travel-time
threshold is exceeded while on-time performance
measures how many times the threshold is not
exceeded.

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the reliability of the performance is represented

by the variability that occurs across multiple days.
travel time reliability is about travel time
probability density functions (TT-PDFs) that allow
agencies to portray the variation in travel time
that exists between two locations (point-to-point,
P2P) or areas (area-to-area, A2A) at a given point
in time or across some time interval.
reliability is essentially a state of variation in
expected (or repeated) travel times for a given
facility or travel experience.
The definition of reliability includes not only the
idea of variability but failure (or its opposite, ontime) as well.
Used the definition from Project L03.

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Project L04 (Incorporating Reliability Performance

Measures in Operations and Planning Modeling
Tools)
Project L03 (Analytic Procedures for Determining
the Impacts of Reliability Mitigation Strategies)

the level of (un)certainty with respect to the

travel time and congestion levels.

Project C04 (Improving Our Understanding of How

Highway Congestion and Pricing Affect Travel
Demand)
Project C05 (Understanding the Contributions of
Operations, Technology, and Design to Meeting
Highway Capacity Needs)
Project L02 (Establishing Monitoring Programs for
Travel Time Reliability)

Project L07 (Identification and Evaluation of the

Cost-Effectiveness of Highway Design Features to
Reduce Nonrecurrent Congestion)
Project L08 (Incorporating Travel Time Reliability
into the Highway Capacity Manual)

Project L11 (Evaluating Alternative Operations

Strategies to Improve Travel Time Reliability)

Texas Transportation Institute (TTI) Urban Mobility

Report

A 2000 AASHTO Report

2009 Synthesis (Research on Value of Time and

Value of Reliability)
Florida DOT

Reliability can be defined as: The variability in

travel times that occur on a facility or a trip over
the course of time; and the number of times (trips)
that either fail or succeed in accordance with a
pre-determined performance standard or
schedule.
Travel-time reliability is related to the uncertainty
in travel times. It is defined as the variation in
travel time for the same trip from day to day
(same trip implies the same purpose, from the
same origin, to the same destination, at the same
time of the day, using the same mode, and by the
same route).
A distinction is made between variability and
reliability of travel time. Variability refers to the
amount of inconsistency of operating conditions,
while reliability refers to the level of consistency in
transportation service.
Reliability is the percent of ontime performance
for a given time schedule as it applies to freight
transportation.
Reliability is the percent of trips that reach their
destination over a designated facility within a
given travel time (or equivalently, at a given
travel speed or higher
Reliability is defined as the percentage of travel

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that takes no longer than the expected travel time

plus a certain acceptable additional time.
While there is considerable variation in the specific language and complexity of the definitions two
concepts emerge as common to nearly all:
1. Reliability as the variability in travel times and

2. Reliability as the proportion of successes or failures against a pre-established threshold

travel time, e.g., on-time arrivals compared to a schedule.

Does Reliability Have Value?

Regardless of the specific wording, both concepts can be explained in terms of the travel time
distribution. Metrics for measuring reliability can be derived from the travel time distribution.

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Although there are many definitions of reliability, its absence is what we notice. Interim Planning
for a Future Strategic Highway Research Program 1 referred to the lack of reliability as that
frustrating characteristic of the transportation system that prompts motorists to allow an hour to
make a trip that normally takes 30 minutes because the actual trip time is so unpredictable. This
picture of a frustrated public ensures us that reliable travel time is intrinsically valuable.

Two of the most important values obtained from travel demand studies are the value of travel time
(VOT) and the value of travel time reliability (VOR). VOT refers to the monetary values travelers
place on reducing their travel time. VOR connects the monetary values travelers place on reducing
the variability of their travel time. 2 VOT has been long established from a basis in consumer theory
where value is related to a wage rate or some portion of it. It is considered one of the largest cost
components in benefitcost analysis of transportation projects because one of the benefits for
travelers in a transportation improvement is the reduction of travel time. 3

In contrast, VOR is a relatively new concept. Reliability has most often been considered
qualitatively and is associated with the statistical concept of variability. 4 However, it is clearly
recognized by travelers of all types. Travelers account for the variability in their trips by building in
buffers as insurance against late arrival. This action implies that the consequence of arriving late
is costly and should be avoided. 5 Efficiency and productivity lost in these buffers or safety
margins represent an additional cost that travelers absorb.

Reliability is of sufficient value to transportation system users that empirical studies have
demonstrated a willingness to pay for reduced travel time. Variability in the costs which are
acceptable to different travelers for different trips suggests that this value is not a one-size-fits-all
association. 6 The difference in value between users or for the type of use must be quantified to be
understood and applied appropriately.
NCHRP Report 510, 2000
Carrion and Levinson, 2010
3 Concas et al., 2009
4 Kittelson and Associates, 2012
5 Organisation for Economic Co-operation and Development (OECD), 2010
6 Concas et al., 2009
1
2

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For the business traveler and freight shippers, time is money. The just-in-time delivery aspect of
the present economy implies a high cost associated with an unreliable transportation system and a
corresponding value for travel time reliability. Freight providers are a unique category of
transportation users in many aspects; however, the value placed on reliability is consistent with or
greater than other travelers.

In order to be considered substantially in transportation decision making, it is necessary to provide

a quantitative VOR which recognizes these implied or unaccounted for costs that clearly exist. The
lack of a commonly acknowledged and supported means to quantify VOR represents a barrier to
measuring associated benefits and costs as well as use in analysis to support investment decisions.

A key finding in the SHRP 2 C04 research is that Improvements in travel time reliability are at least
as important as improvements in average travel time. Research suggests that the Reliability Ratio,
or the relationship of VOR to VOT, is increasing. This implies that investments to improve
reliability may be equally beneficial to those to reduce typical travel times.

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Aside from the individual value placed on reliability by travelers and freight providers, it represents
an aspect of congestion where transportation agencies can make significant gains even as travel
demand grows. 7 The data suggests that as much as 50% of highway congestion is due to factors
beyond the lack of capacity. Work zones, traffic incidents, weather and special events all contribute
to congested roadways. The costs associated with congestion in the U.S. are tallied in the billions.
In 2010 congestion caused urban Americans to travel 4.8 billion hours more and to purchase an
extra 1.9 billion gallons of fuel for a congestion cost of $101 billion. 8 Strategies and policies that
help address growing urban congestion clearly add value. In situations of significant congestion,
travel time reliability may be even more important (i.e. more valuable) than savings in travel time,
particularly when travelers have constrained schedules. 9

Measuring Reliability

Using reliability as a part of a decision making process requires practitioners to develop

some method or technique to measure the consequences of improving or not improving the
reliability of the transportation system or segment. From a measurement perspective,
reliability is quantified from the distribution of travel times, for a given facility/trip and
time period (e.g., weekday peak period), that occurs over a significant span of time; one year
is generally long enough to capture nearly all of the variability caused by disruptions. A
variety of different metrics can be computed once the travel time distribution has been
established, including standard statistical measures (e.g., standard deviation, kurtosis),
percentile-based measures (e.g., 95th percentile travel time, Buffer Index), on-time measures
(e.g., percent of trips completed within a travel time threshold, and failure measures (e.g.,
percent of trips that exceed a travel time threshold).
The reliability of a facility or trip can be reported for different time slices, e.g., weekday
peak hour, weekday peak period, and weekend. Figure 1 shows an actual travel time
distribution derived from roadway detector data, and how it can be used to define
reliability metrics. The shape of the distribution in Figure 1 is typical of what is found on
freeways it is skewed toward higher travel times. The skew is reflective of the impacts of
disruptions, such as incidents weather, work zones, and high demand, on traffic flow.
NCHRP Report 510, 2000
Schrank et al., 2011
9 Tseng et al., 2005
7
8

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Therefore, most of the useful metrics for reliability are focused on the right half of the
distribution; this is the region of interest for reliability. Note that a number of metrics are
expressed relative to the free-flow travel time, which becomes the benchmark for any
reliability analysis. The degree of (un-)reliability then becomes a relative comparison to the
free-flow travel time.

Figure 1. The Travel Time Distribution is the Basis for Defining Reliability Metrics

Number of Trips (in thousands)

400

Free

95th
99th
Percent Percent
ile
ile

Mean

350
300

Misery
Time

200

Buffer Time

150

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250

100
50
0
4.5

Standard
Deviation
9.5

Planning
Time
Failure
Measure
14.5
19.5

24.5

29.5

Travel Time (in Minutes)

Once the travel time distribution is established and several other traffic flow variables are known,
namely, volume and free-flow speed, a wide variety of reliability metrics can be easily developed.
The discussion so far has focused on using travel time as the basic unit of measurement. However,
for comparing highway sections of different lengths or for aggregating statistics, normalization is
required. Pure travel time can be normalized in one of two ways:

It can be converted to a travel rate, usually expressed in minutes per mile (the inverse of
speed); or
It can be converted to the Travel Time Index (TTI), which is the measured travel time
divided by travel time under ideal or free flow conditions. The TTI is a unitless measure
and thus is normalized.

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2. Use Cases for the Value of Reliability

Defining travel time reliability and accepting that it has value is only the first step. In order to
incorporate travel time reliability into practice within transportation agencies, it is necessary to
provide practitioners with the tools to consider it in the context of the day to day activities that
support transportation decision making. Because reliability is of obvious value to travelers,
practitioners have begun to add this consideration in planning and cost-benefit considerations.
With uncertainty as to exactly how to account for reliability, this consideration is primarily
qualitative and often incorporated after other quantitative considerations have been completed. In
order for travel time reliability to be on a level playing field with other factors, it must be
incorporated into the quantitative analyses and tools that support transportation planning,
programming and project development. Transportation agencies often receive challenges to their
decisions, and for this reason, decisions must be both reasonable and defensible. The research-todate has validated the need and advanced the understanding of how to quantify reliability; but
practitioners need direction on how to apply this research appropriately.

There are three primary uses of the value of travel time reliability:

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1. Economic impact primarily cost-benefit analysis

2. Analysis travel demand modeling and simulation

3. Outreach communicating the value to others (both externally and internally)

2.1 Economic Impact

A cost-benefit analysis represents one of the most common quantitative methodologies used to
support trade-off evaluation in transportation decision making (plan, program and project).
European studies identify cost-benefit analysis is a technique that can be used to evaluate and
prioritize strategies and ensure that the benefits exceed the costs of providing improved reliability.
The European International Transport Forum study identifies cost-benefit as the best option for
including reliability strategies and treatments in the absence of direct road pricing. 10

The value of time is an important element in any cost-benefit analysis of potential investments. The
U.S. Department of Transportation (USDOT) has provided various travel time values to be used in
evaluating transportation projects. These travel time values vary from 50 to 120 percent of the
wage rate, depending on the length and the type of travel (personal or business). 11 These
standardized values are used to monetize the value of reducing travel time by improving
throughput. However, the value of time is only one component of time that needs to be
incorporated into technical analyses. There is also a benefit derived from predictable travel time:
reliability. Incorporating reliability in a basic cost-benefit analysis requires the identification of data
and analyses that can quantify the value of travel time reliability.

These parameters allow a reasonable cost-benefit comparison of potential strategies at a high level
as a part of pre-programming studies, sketch planning or for advance decision making preferences.
A more specific cost-benefit analysis involves the travel demand model analysis or other economic
evaluation tools. The C11 project is currently developing tools that can be used to provide the
wider range of economic impacts outside of the selected transportation improvement option. This
information not only supports trade-off decision making at the planning level, but provides
10
11

OECD, 2010
USDOT, 2003

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stronger information for project development identification of purpose and need. Additional level
of detail in this area will also support a better understanding of the important of reliability to
freight travel that has not been developed as fully.

Although there is a growing interest in expanding the traditional benefit-cost analysis to include
environmental factors such as pollutant emissions, that topic is not included in this synthesis. The
intent here is to support an assessment of the merits of adding reliability as one variable to the
current benefit-cost analysis.

2.2 Analysis

The most robust means of incorporating travel time reliability into transportation decision making
is within the technical analyses that support plan development, project selection and project
development. The traditional tools of travel demand models and simulation models require data
inputs that do not commonly consider travel time reliability. Adjustments within these analyses
are possible to account for the impact of reliability at various levels of sophistication.

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Traveler behavioral changes in response to congestion and the cost of travel as well as
characteristics based on trip purpose or other factors are key inputs to modeling analysis.
Extensive research conducted over the past thirty years has supported significant enhancement of
travel demand modeling. Consideration of travel time reliability now must be added. 12

The willingness to pay for reduced travel time has been found to vary substantially
depending on the characteristics of an individual traveler, as well as the context of the particular
trip the traveler is undertaking. Typical modeling analyses in the US have only accounted for a
limited amount of this variation, typically segmenting by trip purpose (commute versus noncommute), and income segments. In Europe there has been much more research into systematic
variation in VOT, mainly deriving values to use in economic cost-benefit analysis, rather than in
forecasting. 13

The incorporation of travel time reliability measures in demand models and network simulations
models represents a major challenge considering the extensive number of variables that must be
considered. Significant progress has been made in quantifying reliability and its impact on travel
demand. Some promising attempts include:
o

Incorporation of reliability in route choice in (efficient) traffic assignment

Integration of demand and supply sides incorporating reliability

Construction of reliability measures at OD-route level to feed into demand model

Exploration of analytical and explicit (multiple simulations) methods with respect to

each reliability source 14

The costs of unreliable travel may rival those of congestion considering the delays and secondary
effects on other activities that occur. Break down in supply-chains can have significant impacts
beyond the dynamics of freight transportation to affect all users. 15 The seven elements that account
for traffic congestion include six that relate directly to travel time reliability: weather, traffic
SHRP Project C04
SHRP Project C04
14 Vovsha et al., 2011
15 OECD, 2010
12
13

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incidents, special events, work zones and signal timing. The importance of expanding the
practitioners ability to consider these elements in the existing tools and procedures that support
decision making cannot be overstated.

2.3 Outreach

There is clear and consistent evidence that travelers place a high value on information that
supports travel choices in route, mode and time of travel. 16 The freight context of just-in-time
delivery is equally evident. These facts, as well as other benefits identified, are useful in convincing
those with decision making authority in transportation agencies that reliability must be considered
and evaluated.

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Individual practitioners involved in Systems Operations and Management (SO&M) have

communicated why reliability is important to both travelers and transportation agency decision
makers within their state. To date, however, the benefits of reliability have been described
qualitatively. Many of the projects authorized in the SHRP2 Reliability Program (and reviewed for
this synthesis) have been aimed at developing techniques and methodologies for analyzing the
benefit of travel time reliability quantitatively. The Program has also recognized, however, that it is
also important to develop a more comprehensive and national approach for communicating
benefits, both qualitative and quantitative, to decision makers and travelers, and has funded two
projects aimed at developing a coordinated approach to communicating the important of reliability,
L17 and L31. These SHRP2 projects have resulted in in the development of a reliability brand. In
parallel with SHRP2 both AASHTO and FHWA have had initiative aimed at communicating the
importance of transportation system reliability. As a part of implementing more quantitative
measures it is important to consider how the validity of the methodologies, the complexity of the
analyses and quantified benefits that result will be communicated to important constituencies and
decision makers.

16

OECD, 2010

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3. Past Studies on the Value of Reliability

3.1 Introduction
Estimation of time and delay-related benefits of improved transportation system is normally based
on evaluation of time saving attributed to road-users. However, when the transportation system is
congested, other delay-related factors, particularly reliability, may be more vital to road-users than
the time savings. Reliability of a transportation system raises concerns with the uncertainties
characterizing travels and arrival at destinations. Implicit or explicit costs for late arrival may
outweigh the benefit of time savings. These costs include loss of income (e.g., hourly workers may
have wages deducted), promotion, or loss of job.

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Additionally, freight faces similar uncertainties in goods delivery. Travel time reliability is
becoming increasing critical to businesses, especially the manufacturing sector as many
manufacturers are positioning to adopt just-in-time manufacturing processes and other scheduledependent inventory, assembly and distribution logistics. By having a reliable transportation
system or network, a manufacturer can minimize its inventory costs. Therefore, an unreliable
transportation system makes it difficult for manufacturer to maximize potential gains in
productivity from the use of the transportation system.

3.2 Concepts Used in Valuing Reliability

Before a practitioner uses any value or specific analytical technique he/she should understand the
fundamental basis and limitations of the underlying research. This section is intended to provide an
overview of some of the theoretical underpinnings of research results and findings discussed
earlier. This section provides only an abbreviated version of the research approaches and concepts
reviewed for this synthesis. Appendix B provides a more complete analysis of these resources.

Early Theoretical Work

Early theoretical contribution on traveler reactions to uncertain travel time by Gaver (1968) is
based on utility maximization. Gavers utility maximization framework demonstrates that
commuters (or other travelers with desired arrival time) will depart with a head start time,
meaning travelers anticipate variance in travel times so they plan their departure a little earlier
than if travel times were certain. Polak (1987) adds a concave transformation to Gavers linear
utility function account for risk aversion, while Bates (1990) also develops a model to account for
shifts in earlier departure times as variance increases. Jackson and Jucker (1982) assume that
travelers tradeoff the expected travel time against travel-time variance (or standard deviation).
Unfortunately, this theory ignores any scheduling costs and does not imply any functional form for
the relationship between cost and unreliability.

Small (1982) establishes empirically that scheduling costs play a major role in timing of commuter
departures by defining a variable to measure how early or late the commuter is vis--vis the official
work start time.

The theoretical model of Noland and Small (1995) is considered an extension of both Gaver (1968)
and Polak (1987) coupled with Small (1982). It therefore accounts for travelers choice of
alternative departure times and changing congestion levels. Therefore, this model allows for
decomposition of morning commute which is the expected cost of schedule delay, lateness and
travel time.
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Approaches to Defining Reliability for Valuation Studies

Mean-Variance
Unreliability is measured as the standard deviation (or variance) or other measure of dispersion
from the travel time distribution. It is assumed that a decision-maker's objective is to minimize the
sum of two terms (both assumed to be sources of disutility): expected travel time, and the travel
time variability. While the standard deviation is the most common measure of reliability used in
past studies, others have been used as well. These include the interquartile range and differences
of percentiles (e.g. 90th percentile and median, 80th percentile and the median). The median has
been used to represent the average condition as well.

This approach allows the estimation of the Value of Travel Time Reliability (VOR) (also referred
as the Value of Travel Time Variability). This value represents the travelers' monetary weight for
reducing variability (i.e. improving reliability). In addition, the Reliability Ratio is defined as the
ratio of the value of travel time reliability, and the value of travel time (VOT). 17 This ratio permits
estimation of the Value of Reliability, especially when only the Value of Travel Time is known. 18

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Agreement on the most appropriate dispersion measure would benefit application of this
approach. However, the dispersion measures assume different types of traveler behavior. If the
standard deviation or the interquartile range is used, it is assumed that travelers value both early
and later arrivals equally (since the standard deviation covers both sides of the mean.) If the
dispersion measure covers only the right side of the travel time distribution (e.g., the 80th percentile
minus the median), then it is assumed that travelers only value lateness.

A potential problem with the mean-variance approach relates to how it is developed with stated
preference or revealed preference surveys (covered in Section 3.3). If the overall mean time is used
as the indicator of typical or usual conditions (for the VOT), then it will include a portion of the
variability component. This can lead to double counting benefits when applied. Since the travel
time distribution is skewed, using the median instead of the mean can help to control for this, which
would be helpful in revealed preference studies where the travel times can be established with field
data, but adjusting for it in stated preference studies is more problematic.
Scheduling Delays (with Variability)

In this approach, it is assumed that travelers define their own version of a schedule (arriving on
time at a destination) and adjust their departure times, routes, and modes accordingly. In the
scheduling delay approach, early arrivals can be valued differently than late arrivals. Reliability
and scheduling are related concepts. The former refers to the disutility of the inconvenience and
possible penalties attributed to the unreliability of travel times. The latter refers to the disutility of
arriving either too early or too late, when the traveler has time restrictions (e.g. inflexible vs.
flexible schedules).

Recent research has shown equivalence (under certain conditions) between mean-variance and the
scheduling delays model (see Fosgerau and Karlstrom (2010)), as well as adding additional
contributing factors to potential analyses (see Appendix C). Noland and Polak (2002) offer the
following observation:
17 More formally, the Reliability Ratio is the value of a time savings in reliability (e.g., one minute of standard
deviation saved), divided by the value of average travel time savings (e.g., one minute of usual or average
travel time saved).
18 Transportation Benefit-Cost Analysis: Travel Time Reliability

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While [our] analysis suggests an equivalence of the two theoretical approaches

(scheduling models versus the mean-variance approach), it appears that in most
cases, the scheduling cost formulation captures more of the behavioural reactions of
travellers. This hinges to a large extent on the value of the coefficient associated
with the probability of late arrival and the time varying nature of recurrent
congestion. There may be benefits in combining both approaches. One could specify
a schedule delay model that includes an additional term that also captures disutility
associated with variability independent of scheduling concerns. Empirical studies
have examined this and we discuss these results below.

3.3 Research Methods Used

AF

Survey-Based Methods

Theoretical considerations aside, there are also practical differences between the mean-variance
and scheduling approaches. As the name implies, the scheduling approach requires knowledge of
travelers schedules and the distribution of their associated arrival times, items which are usually
not available in when forecasting travel conditions.

Econometric analysis favors use of observation data usually related to observed choices, called
revealed-preference (RP) data. This data technique underpins early studies in travel time
valuation. However, there are numerous problems associated with finding real choice situations
with adequate variation to yield very detailed reliable estimates (statistically). The above outlined
problems led to an interest in the use of hypothetical choice data, generally called the statedpreference (SP). In SP experiments, respondents are asked to state or indicate (paper or webbased) their preference for route choices with various attributes. The attributes include drive time,
congestion, and travel time variability. SP has become the predominant data technique used in most
studies relating to valuation of travel time saving and travel time variability. Research has shown
that the two techniques can result in different estimates of VOT and VOR. In addition, there are
concerns with SP-based studies related to the presentation format and concerns that the values
placed on punctuality, early or late arrival, by the researchers may not reflect true population
values (see Appendix B).

Options Theoretic Approach

(NOTE: the following is a discussion of an approach developed in SHRP 2 Project L11, Evaluating
Alternative Operations Strategies to Improve Travel Time Reliability. The discussion is taken directly
from a working paper for SHRP 2 Project L17. 19 This approach is a radical departure from past
reliability valuation research and to date is the only one of its kind. One U.S. transportation agency
has adopted this approach for valuing reliability.) 20

19
20

Well-established techniques exist in economics for estimating the value of an

opportunity whose future value is not known with certainty, but can be described in
terms of probabilities. A person can purchase an option that gives them the right to
exercise an opportunity (e.g., to buy or sell something) at a specific point in time, or
up to a specific point in time, depending on the type of option. A car insurance policy
is an example of an optionone pays an insurance premium to obtain the
opportunity to guarantee that one will avoid paying a significantly larger sum in the

Kittelson and Associates, 2012

Puget Sound Regional Council, 2010

- 15 -

unlikely event of an accident. So-called real options involve the analysis of things
that are not readily traded.

Continuing with the insurance-theme, one can, for example, purchase insurance that
a communications satellite will perform at a certain level for a certain period of
time, or that one will be covered for unexpected travel expenses due to being
delayed as a result of sickness, volcanic eruptions, etc. One can theorize that, if such
a product were available, motorists would be willing to pay a premium for travel
time insurance to compensate them for travel times exceeding a guaranteed level.
As this insurance is hypothetical and would involve compensation for time loss
rather than a direct monetary loss, it can be considered a type of real option.

AF

The value of hypothetical travel time insurance represents the reduced,

guaranteed speed that motorists would be willing to accept in exchange for
insurance that speeds would never fall below the guaranteed value. Instead of
paying the premium with money, the premium is paid in the form of travel time.
Under unreliable conditions, motorists would experience a mean travel speed x and
would risk that their travel time might occasionally be very long.

With travel time insurance, motorists would be provided with a reduced,

guaranteed minimum speed of y (y<x). The difference in speeds between the risky x
and the guaranteed y can be converted to an increased travel time over the study
roadway (i.e., the insurance premium); this travel time can then be converted into a
monetary value based on an assumed value of time.

The mathematics of determining this value is derived from options theory in

economics. For typical applications, the guaranteed speed is taken as the mean
travel time and the length of the option period (insurance policy) is taken as the
travel time required to travel the length of the roadway facility at the lowest 1%
speed. For rare-event applications, the variable used for the guarantee could be
event duration or the number of events during the life of the project.

3.4 Summary of Research on the Value of Reliability

Passenger Travel

Several of the research studies reviewed for this paper include a Reliability Ratio a value that
might support an analysis of the value of travel time reliability in specific circumstances. Table 1 at
the end of this section summarizes the values of reliability for passenger travel that were included
in the reviewed research. The emphasis is on showing the Reliability Ratio and the reliability
metric or definition in each study. Several recent summaries of past research on the valuation of
reliability for passenger travel have assessed these studies:

21
22

The aforementioned white paper from SHRP 2 Project L17 21

An unpublished review conducted for SHRP 2 L05
A Florida DOT Research Report 22
A forthcoming TRB paper publication by Carrion and Levinson 23

Kittelson and Associates, 2012

Concas et al., 2009

- 16 -

Of these, the Carrion and Levinson work is the most comprehensive. The reviews were all intended
to determine reasonable values for VOR and the Reliability Ratio, in addition to critiquing the
theoretical basis of the studies and their methodologies. Figure 2 is taken directly from Carrion and
Levinson. They were selective in their choice of studies as they were using them for a metaanalysis. It is interesting that there is less variation among more recent studies, and if the means of
each individual study is used, the reliability ratios are grouped in the 0.5 1.5 range. Previously,
SHRP 2 Project C04 also noted the same range. The SHRP 2 L05 effort more narrowly focused the
Reliability Ratio range to 0.9 1.25 based on including only the research with the most rigorous
methods. The FDOT study recommended a Reliability Ratio range of 0.8 1.0, based on their
assessment of the most rigorous studies. 24

AF

Figure 2. Reliability Ratios from Previous Studies

Source: Carrion and Levinson (2012)

Many non-U.S. countries have undertaken their own review of the issue and have recommended
specific values for VOR and/or the Reliability Ratio. Kauppila provides an excellent summary of
these: 25

Netherlands: Reliability Ratios of 0.8 and 1.4 for personal auto and public transit,
respectively. (Being updated; United Kingdom may adopt the updated number.)
New Zealand: Reliability Ratio of 0.8 for personal autos
Australia: Reliability Ratio of 1.3 for personal autos
Sweden: Reliability Ratio of 0.9 for all trip types
Canada: Transport Canada study recommended a Reliability Ratio of 1.0

Carrion and Levinson, 2012

The authors also mentioned that the value could be as much as three times higher if strict schedule
adherence is required for the trip.
25 Kauppila, 2011
23
24

- 17 -

The reliability information garnered from surveys can be used effectively in travel forecasting
procedures. It must be noted that using a single (composite) Reliability Ratio in technical analyses
may be misleading. Researchers have noted that just as for the VOT, the VOR can vary by a number
of factors. SHRP 2 Project C04 found that the Reliability Ratio varies as a function of trip type
(work/nonwork) and income level. SHRP 2 Project L04 extended this work and derived an
expansive set of Reliability Ratios for combinations of trip type, income, and trip length. In general,
the influence of these factors is:

Trip type the Reliability Ratio for the trip to work is higher than the trip from work or
nonwork trips.
Income for the work trip, lower income groups have a higher Reliability Ratio
(presumably because their work schedules are more rigidly fixed by employers).
Trip length for the work trip, the Reliability Ratio decreases with trip distance.

The International Transport Forum made similar observations in a recent publication: 26

AF

A range of reliability values is required to reflect the different major user groups. It
is difficult to generalise about the value of reliability as it will be project, location,
user, and time-specific. For one project studied, the value of improvements in
reliability were found to be negligible, whereas for another project they were found
to add 25% to the welfare benefits of time savings achieved. It is important to
recognise the importance of disaggregating user values of reliability the
granularity of reliability. Different values are placed on reliability by different
network users at different times and for different trip purposes. Therefore, a single
monetary value for reliability will be of little, if any, use in project appraisal.
Practitioners cannot assume that values used in one study are readily transferable
to a project in another situation. It is also important to avoid potential doublecounting when factoring reliability into project assessment. This can arise if the
standard values of time used to assess average time savings already have an
implicit, crude value for reliability incorporated in them.

26

International Transport Forum, Policy Brief: Seamless Transport, April 2012.

- 18 -

Table 2. Past Research on the Value of Reliability: Passenger Travel

Study Type

Reliability Ratio
(personal auto use)

RP/SP

1.18

90th - 50th Percentile

Ghosh (2001)

RP

1.17

90th - 50th Percentile

Li, Hensher, and Rose (2010)

SP

0.70

Borjesson (2008)

SP

1.27

Small et al. (1995)

SP

2.30

Standard deviation

Small et al. (1999)

SP

2.51

Standard deviation

Small, Winston, and Yan (2005)

RP

0.91

75th - 25th Percentile

Levinson and Tilahun (2008)

SP

0.89

90th - 50th Percentile

Carrion and Levinson (2010)

RP

0.91

90th - 50th Percentile

De Jong et al. (2007)

SP

1.35

Standard deviation

Forsgerau et al (2008)

RP

1.00

Standard deviation

RP/SP

0.97

90th - 50th Percentile

SP

0.98

RP/SP

0.26

SP

0.76

Standard deviation

Black and Towriss (1993)

SP

0.55-0.70

Standard deviation

Tilahun and Levinson (2007)

SP

1.0

Tseng, Ubbels, and Verhoef (2005)

SP

0.5

Yan (2002)

Asensio and Matas (2008)

Bhat and Sardesai

Senna (1993)

Scheduling approach; standard

deviation
Ratio of sensitivity to standard deviation
to sensitivity of the mean

27

AF

Brownstone and Small (2003)

Reliability Metric/Definition

Authors

Scheduling approach; standard

deviation
Scheduling approach; standard
deviation

Scheduling approach; difference

between actual late arrival and usual
travel time
Scheduling approach; difference
between early/late arrival time and
preferred arrival time

SP

0.75

Average schedule delay (late and early)

SHRP 2 C04 (Pub. Pending)

RP

0.7-1.5

Standard deviation per unit distance

SHRP 2 L04 (Pub. Pending)

RP

0.57-2.69

Standard deviation per unit distance

Koskenoja (1996)

27

An earlier version of this work used the difference in the 80th and 50th percentiles.

- 19 -

Freight Travel

AF

Studies on the valuation of freight reliability are not as prevalent as for passenger travel. Appendix
D provides an overview of all of the freight related studies reviewed for this synthesis. These
studies indicate that the freight value of reliability varies by commodity, with bulk commodities
having the lowest value. However, as Hamer et al. (2005) 28 noted, there is little consensus on what
the values of VORs or Reliability Ratios should be. It is true that for highways, the VOT for freight
(trucking) is higher than for personal auto use. For example, FHWAs Highway Economic
Requirements System (HERS) model uses a $19.86 VOT for autos and a $36.05 value for
combination trucks (2006 dollars). If the Reliability Ratios for freight are equivalent to passenger
travel, i.e., around 1.0, then VOR for freight will be higher.

28

Hamer et al., 2005

- 20 -

4. Incorporating the Value of Reliability into Technical Analyses

4.1 Cost/benefit analysis

The research to date has made significant contributions to understanding the theoretical
underpinning for a quantitative representation of the value of travel time reliability. The next step
is moving theory into practice. Integrating value of travel time reliability into the technical analysis
that support plan, program and project decisions will help both practitioners and policy makers
level the playing field in considering trade-offs among investment choices. The question,
therefore, is whether or not the research to date is sufficient to incorporate a value for reliability in
the primary quantitative analytical techniques and tools used to support trade-off decision making.
In Section 2 this paper outlined three potential use cases for a value of travel time reliability:
cost/benefit analysis, travel demand modeling and micro-simulation modeling. Incorporating the
value of travel time reliability into each of these is discussed below.

AF

The economic benefits from improved travel time reliability are appearing more commonly in
benefit-cost analyses. 29 To incorporate travel time reliability in any technical analyses, the
following are needed:
A measure for travel time reliability
A value for reliability

A method for predicting future reliability

A method for estimating changes in reliability due to a project 30

Measures for travel time reliability have been extensively covered they all describe the different
aspects of the travel time distribution. The primary remaining issue related to measures is what is
the appropriate measure of reliability to use in valuation studies, i.e., what aspect of variability do
travelers consider? This issue includes not only the appropriate metric but the conceptual
approach: should it be mean-variance, scheduling delay, or options theoretic? For passenger travel,
the mean-variance approach is the easiest to implement within existing modeling frameworks.
Choice of the appropriate metric is gravitating toward the standard deviation or a measure of
spread on the upper end of the travel time distribution (e.g., 80th percentile travel time minus the
median, 90th percentile travel time minus the median).

The value that travelers place on reliability has proven to be elusive, but sufficient experience exists
to allow selection of interim values. Several European countries have adopted this approach. There
appears to be a consensus that for passenger travel, highway users value reliability at roughly the
same rate as for average/typical travel time (i.e., Reliability Ratio of about 1.0). There is not as
strong a consensus for the reliability valuation for freight travel, and the value is likely to vary
widely by commodity type. High value, time sensitive commodities should have a reliability value
significantly greater than for passenger travel. Bulk commodities, which are not extremely
sensitive to delivery times, will have a far less value, but they are not very likely to be shipped over
highways.
29
30

Puget Sound Regional Council, 2010

Transportation Benefit-Cost Analysis: Travel Time Reliability

- 21 -

4.2 Methods for Predicting Reliability: Travel Demand Modeling

In modeling applications, reliability needs to be treated both as an input to and an output from the
process, just as average/typical travel time has always been used. As an input, reliability (and
average travel time) is used to predict traveler behavior the demand side of the problem. As an
output, it is a measure of the performance that results from the operation of the transportation
system, more specifically, from disruptions (e.g., incidents, work zones, inclement weather) and
other failures (e.g., traffic control devices) this is the supply side of the problem.

Project C10B has developed a method for including reliability in its analysis framework. As of this
writing, it has yet to be tested, but the same structure can be used in other applications. A
description of this method is included in Appendix E.

AF

As an input, reliability affects travelers decisions about trip-making and the choice of destination,
mode, and route. It can be thought of as an extra impedance to travel over and above the average
travel time generally used in demand models. Note that current models definition of average travel
time is based solely on recurring (demand and capacity) conditions. Considering reliability means
that nonrecurring sources of congestion factor into the process.

The concept of extra impedance due to unreliable travel is probably the best way to incorporate
reliability into the modeling structure as an input. SHRP 2 Project L04 is using this approach where
the impedance on a link can be captured as a generalized cost function that includes both the
average travel time and its standard deviation (which is used as the indictor of reliability).
Therefore, L04 functions will be used to establish the total link impedance for trip distribution and
assignment purposes, if they become available in time. If not, the use of Travel Time Equivalents
will be used, as discussed below.
In order to apply this method, a method must exist for predicting the standard deviation of travel
time. SHRP 2 Project L03 developed such methods from empirical data, using the Travel Time
Index (TTI) as the dependent variable. Appendix E provides the details of this method.

As of this writing, coefficients for the reliability utility function have not been developed by Project
L04. An alternate method would be to compute travel time equivalents for reliability. For this
purpose, empirical results developed by Small, Winston, and Yan (2005) could be applied. They
defined unreliability as the difference between the 80th percentile travel time and the 50th
percentile travel time and found the value of unreliability to be approximately equal to the value of
time.

Florida DOT has also developed a method for predicting reliability based on predictive equations. 31
This method was developed primarily for estimation of system-wide reliability, but it can be
applied at the corridor level as well.

4.3 Methods for Predicting Reliability: Micro-simulation

In addition to the SHRP 2 research, reliability estimation methods have been developed for FHWAs
Integrated Corridor Management (ICM) program using micro-simulation. This approach is based on
defining scenarios that represent different combinations of operational conditions and demand. After
model calibration, multiple model runs are conducted for each scenario to account for random
variability in travel demand and supply conditions. Simulation runs are typically performed for each
31

Elefteriadou et al., 2012

- 22 -

AF

scenario to obtain statistically representative results. The scenarios are defined via cluster analysis
reflecting different operational conditions (including fluctuations in travel demand, location and
intensity of incidents, weather events, special events, and work zones). Results are used to calculate the
travel time reliability for each scenario by comparing the standard deviation across the scenario-based
simulation runs against the average run. A more extensive discussion of the application of the C10B
research can be found in Appendix E.

- 23 -

5. Summary of Findings and Workshop Next Steps

5.1 Summary of Findings

Past studies of reliability valuation start with defining reliability, then determining how
travelers value the components of travel time.

Travel time reliability has been defined in a variety of ways, most of them closely related.
Two concepts have emerged: (1) reliability as the variability in travel times and (2)
reliability as the proportion of successes or failures against a pre-established threshold
travel time, e.g., on-time arrivals compared to a schedule. Regardless of the definition used,
both concepts can be explained in terms of the travel time distribution. Metrics for
measuring reliability are derived from the travel time distribution.
Two approaches have been used in past studies to defining reliability for valuation studies:
o

Mean-variance which uses statistical measures to separate out the value of

typical/usual travel time (VOT; the mean or other measure of central tendency) and
the value of reliability (VOR; measures for the dispersion of the travel time
distribution, such as the standard deviation)

AF

Schedule Delay which focuses on the magnitude of the time embodied by both
early and late arrivals in relation to a pre-determined schedule

The mean-variance approach is easy to implement in existing analysis frameworks.

However, there is concern that the mean value may include a portion of the reliability
component, leading to double counting of benefits when analyzing an improvement.
Several researchers have indicated their preference for the schedule delay approach on
conceptual grounds, but it is difficult to implement for the highway mode where travelers
schedules are not known and would vary widely if they were.

Three methods have been used to determine the VOT and VOR analytically:
o

Revealed preference surveys where actual travel behavior is observed and related
to field measurements of travel time

Stated preference surveys where respondents are asked to explain their current
traveler behavior and/or how they would react to hypothetical travel situations

Options theoretic approach where the reliability is considered to be a sort of

insurance, represented by a reduced, guaranteed speed that motorists would be
willing to accept in exchange for insurance that speeds would never fall below the
guaranteed value. Instead of paying the premium with money, the premium is paid
in the form of travel time

Studies estimating the value of reliability (VOR) are not as plentiful as studies estimating
the value of time (VOT). Although there is still not a unanimous concession on the VOT,
there is a long history using it in economic evaluations.

- 24 -

Past studies of reliability valuation for passenger travel have found a wide range of values,
but the more recent studies appear to be coalescing around a Reliability Ratio of 1.0.

Many non-U.S. countries have undertaken their own review of reliability valuation and have
recommended specific values for VOR and/or the Reliability Ratio for use in economic
analyses:
o

o
o
o
o

Netherlands: Reliability Ratios of 0.8 and 1.4 for personal auto and public transit,
respectively. (Being updated; United Kingdom may adopt the updated number)

The Reliability Ratio, the ratio of the VOR divided by the VOT, is a convenient way of
estimating the VOR for economic evaluations. If the Reliability Ratio can be established
beforehand and the VOT is known, VOR can be computed.

New Zealand: Reliability Ratio of 0.8 for personal autos

Australia: Reliability Ratio of 1.3 for personal autos

Sweden: Reliability Ratio of 0.9 for all trip types

AF

Canada: Transport Canada study recommended a Reliability Ratio of 1.0

Use of a single (composite) Reliability Ratio in technical analyses may be misleading.

Researchers have noted that just as for the VOT, the VOR can vary by a number of factors.
SHRP 2 Projects C04 and L04 derived an expansive set of Reliability Ratios for combinations
of trip type, income, and trip length. In general, the influence of these factors are:
o

Income for the work trip, lower income groups have a higher Reliability Ratio
(presumably because their work schedules are more rigidly fixed by employers)

Trip type the Reliability Ratio for the trip to work is higher than the trip from work
or non-work trips

Studies of how freight users value reliability are not as plentiful as for passenger travel.
Some evidence exists that both the VOR and Reliability Ratio is higher than for passenger
travel, but these values are highly dependent on the type of commodity.

Trip length for the work trip, the Reliability Ratio decreases with trip distance

A framework for applying reliability valuation in economic analyses requires:

o

o
o

A measure for travel time reliability. Although several measures are available,
analysts will be confined to the ones used in the studies that establish the value of
reliability
A value for reliability

A method for predicting future reliability that is also sensitive to the changes in
reliability due to an improvement. Currently, several options are available for
reliability prediction and SHRP 2 Projects L04, L08, C10A, and C10B will provide
additional methods
- 25 -

5.2 Workshop Next Steps

One of the primary purposes of the Workshop is to validate what aspects of the value of travel time
reliability research are ready to be incorporated into practice. Based on this synthesis there are
some questions ripe for additional discussion. Some of these are:

Assuming acceptance that research supports a Reliability Ratio of 1 for passenger travel
what processes or analyses would practitioners use this ratio in practice?

Based on the research findings would it be better to have a range for a passenger Reliability
Ratio? If so what should the range be? What factors or criteria should a practitioner use in
determining the value within the range to use?
Are there risks to using a Reliability Ratio? If yes, what are they?

Are there institutional barriers to incorporating a Reliability Ratio into practice? If yes, what
are they?
Do technical analyses have to be modified to accommodate the valuation of reliability? If so,
how?
Are we ready to establish any specific value or range of values of a Reliability Ratio for
freight?

What is the proper method for measuring reliability for the purpose of valuation? (Past
research has relied on two approaches: (1) mean-variance and (2) scheduling delay).

Why do practitioners need a value of travel time reliability? What are the benefits of
incorporating it into their technical analyses and agency decision making? Are the benefits
greater or less depending on what decisions are being made (planning, corridor planning,
project-level)?

AF

What could FHWA do to support implementation? What AASHTO do to support

implementation? Are there other organizations that need to be involved in implementing
results of the value of travel time reliability research?

What gaps in knowledge remain? What gaps could SHRP2 potentially address given within
the time and resources remaining?

- 26 -

References
Bates, J. 1990. Modifying Generalised Cost to Deal with Uncertain Travel Times, paper prepared
for the 17th colloquium Vervoersplanologisch, Speurwerk, Den Haag, November.

Brownstone, D. and K.A. Small. 2003. "Valuing Time and Reliability: Assessing the Evidence from
Road Pricing Demonstrations", Transportation Research Part A: Policy and Practice, 39.

Carrion, C. and D. Levinson. 2010. Value of reliability: High occupancy toll lanes, general
purpose lanes, and arterials, in Conference Proceedings of 4th International Symposium on
Transportation Network Reliability in Minneapolis, MN (USA).

Carrion, C. and D. Levinson. 2012. Value of Travel Time Reliability: A review of current evidence,
January 26.

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Concas, Sisinnio and Kolpakov. 2009. Synthesis of Research on Value of Time and Value of Reliability,
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DOT, March 30.

Elefteriadou, L. and X. Cui. 2007. Travel Time Reliability and Truck Level of Service on the Strategic
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Fosgerau, M. and Karlstrom A. 2010. The value of reliability, Transportation Research Part B, Vol.
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Hamer et al. 2005. The value of reliability in transport. Outcomes of an expert workshop, RAND
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International Transport Forum, Policy Brief: Seamless Transport, April 2012.

Jackson,W. and J. Jucker. 1982. An empirical study of travel time variability and travel choice
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Jenelius, E., L.-G. Mattsson, and D. Levinson. 2011. Traveler delay costs and value of time with trip
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Kauppila, Jari. 2011. State-of-Practice in Incorporating Reliability into Cost-Benefit Analysis,

presentation given at the 2011 TRB Summer
Meeting, http://www.transportationeconomics.org/agendas-and-minutes

Kittelson and Associates. 2012. Draft Guidebook: Placing a Value on Travel-Time Reliability,
prepared for Strategic Highway Research Program 2, Project L17 A Framework for Improving
Travel-Time Reliability, January.

Noland, R. and K. Small. 1995. Travel-time uncertainty, departure time choice, and the cost of
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Noland, R.B. and J.W. Polak. 2002. Travel time variability: a review of theoretical and empirical
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Organisation for Economic Co-operation and Development (OECD). 2010. Improving Reliability on
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Polak, J. 1987. Travel Time Variability and Travel Departure Time Choice: A Utility Theoretic
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- 28 -

APPENDIX A
Definitions of Travel Time Reliability
Below is a complete discussion of the various definitions of travel time reliability that are included
in the numerous research reports reviewed for this synthesis and workshop working paper.

AF

In terms of highway travel, the F-SHRP Reliability Research Program defined reliability this way:
from a practical standpoint, travel-time reliability can be defined in terms of how travel times vary
over time (e.g., hour-to-hour, day-to-day). This concept of variability can be extended to any other
travel-time-based metrics such as average speeds and delay. For the purpose of this study, travel
time variability and reliability are used interchangeably.
A slightly different view of reliability is based on the notion of a probability or the occurrence of
failure often used to characterize industrial processes. With this view, it is necessary to define what
failure is in terms of travel times; in other words, a threshold must be established. Then, one can
count the number of times the threshold is not achieved or exceeded. These types of measures are
synonymous with on-time performance since performance is measured relative to a preestablished threshold. The only difference is that failure is defined in terms of how many times the
travel-time threshold is exceeded while on-time performance measures how many times the
threshold is not exceeded.

In recent years, some non-U.S. reliability research has focused on another aspect of reliability the
probability of failure, where failure currently is defined in terms of traffic flow breakdown. A
corollary is the concept of vulnerability which could be applied at the link or network level: this is
a measure of how vulnerable the network is to breakdown conditions.

Project C04 (Improving Our Understanding of How Highway Congestion and Pricing Affect
Travel Demand) defined reliability as the level of (un)certainty with respect to the travel time
and congestion levels. It then used statistical measures, primarily the standard deviation of travel
time, as the metrics used in subsequent analyses.
Project C05 (Understanding the Contributions of Operations, Technology, and Design to
Meeting Highway Capacity Needs) defined it as the reliability of the performance is
represented by the variability that occurs across multiple days.

Project L02 (Establishing Monitoring Programs for Travel Time Reliability) used this
definition:
It is important to start by observing that travel time reliability is not the same as (average) travel
time... travel time reliability is about travel time probability density functions (TT-PDFs) that
allow agencies to portray the variation in travel time that exists between two locations (point-topoint, P2P) or areas (area-to-area, A2A) at a given point in time or across some time interval. It is
about estimating and reporting measures like the 10th, 50th, and 95th percentile travel times.

Functionally, Project L02 used the notion developed in Project L03 that reliability can be measured
using the distribution of travel times for a facility or a trip.
Project L04 (Incorporating Reliability Performance Measures in Operations and Planning
Modeling Tools) used this definition:
- 29 -

models formulated in this research is based on the basic notion that transportation reliability is
essentially a state of variation in expected (or repeated) travel times for a given facility or travel
experience. The proposed approach is further grounded in a fundamental distinction between 1)
systematic variation in travel times resulting from predictable seasonal, day-specific, or hourspecific factors that affect either travel demand or network capacity, and 2) random variation that
stems from various sources of largely unpredictable (to the user) unreliability.
Project L03 (Analytic Procedures for Determining the Impacts of Reliability Mitigation
Strategies) used an expanded definition of reliability to include not only the idea of variability but
failure (or its opposite, on-time) as well.

Project L07 (Identification and Evaluation of the Cost-Effectiveness of Highway Design

Features to Reduce Nonrecurrent Congestion) used L03s definition.

AF

Project L08 (Incorporating Travel Time Reliability into the Highway Capacity Manual has
proposed to define reliability:
Travel time reliability relates to how travel times for a given trip and time period perform over
time. For the purpose of measuring reliability, a trip can occur on a specific segment, facility
(combination of multiple segments), any subset of the transportation network, or can be broadened
to include a travelers initial origin and final destination. The concepts discussed here apply to all of
these units, as long as it is travel time over some distance that is being measured. Measuring travel
time reliability requires that a sufficient history be present in order to track travel time
performance.
There are two widely held ways that reliability can be defined. Each is valid and leads to a set of
reliability performance measures that capture the nature of travel time reliability. Reliability can
be defined as:

The variability in travel times that occur on a facility or a trip over the course of time; and
The number of times (trips) that either fail or succeed in accordance with a predetermined performance standard or schedule. 32

In both cases, reliability (more appropriately, unreliability) is caused by the interaction of the
factors that influence travel times: fluctuations in demand (which may be due to daily or seasonal
variation, or by special events), traffic control devices, traffic incidents, inclement weather, work
zones, and physical capacity (based on prevailing geometrics and traffic patterns). These factors
will produce travel times that are different from day-to-day for the same trip.

Project L11 (Evaluating Alternative Operations Strategies to Improve Travel Time Reliability)
defined reliability:
Travel-time reliability is related to the uncertainty in travel times. It is defined as the variation in
travel time for the same trip from day to day (same trip implies the same purpose, from the same
origin, to the same destination, at the same time of the day, using the same mode, and by the same
route). If there is large variability, then the travel time is considered unreliable. If there is little or
no variability, then the travel time is considered reliable.

The Florida Department of Transportation (FDOT) defines reliability as the percentage of travel
that takes no longer than the expected travel time plus a certain acceptable additional time (FDOT,
In the economic valuation literature, this concept is referred to as schedule delay the amount of travel
time deviation from a fixed value (e.g., a published schedule or appointment time).
32

- 30 -

2000). This approach, while clearly defining a threshold of unacceptable variability, relies on the
value of median travel time, which may change from year to year and may present difficulties in
tracking reliability over time (Elefteriadou and Cui, 2007). 33

The Texas Transportation Institute (TTI) Urban Mobility Report makes a distinction between
variability and reliability of travel time. Variability is refers to the amount of inconsistency of
operating conditions, while reliability refers to the level of consistency in transportation service
(2003).

A report by the American Association of State Highway and Transportation Officials

(AASHTO) defines reliability as the percent of ontime performance for a given time schedule as it
applies to freight transportation (AASHTO, 2000).

AF

A recent travel time reliability report prepared for FDOT defines reliability as the percent of
trips that reach their destination over a designated facility within a given travel time (or
equivalently, at a given travel speed or higher). 34

33
34

Elefteriadou and Cui, 2007

Elefteriadou and Cui, 2007

- 31 -

APPENDIX B
Concepts Used in Valuing Reliability
Early Theoretical Work

AF

Early theoretical contribution on traveler reactions to uncertain travel time by Gaver (1968) is
based on utility maximization. Gavers utility maximization framework demonstrates that
commuters (or other travelers with desired arrival time) will depart with a head start time,
meaning travelers anticipate variance in travel times so they plan their departure a little earlier
than if travel times were certain. Polak (1987) adds a concave transformation to Gavers linear
utility function account for risk aversion, while Bates (1990) also develops a model to account for
shifts in earlier departure times as variance increases. Jackson and Jucker (1982) assume that
travelers tradeoff the expected travel time against travel-time variance (or standard deviation).
Unfortunately, this theory ignores any scheduling costs and does not imply any functional form for
the relationship between cost and unreliability.

Small (1982) establishes empirically that scheduling costs play a major role in timing of commuter
departures. Let t w be the official work start time. If a commuter leaves home at time t h and the
travel time on a particular day is T, then the commuter will arrive early if t h +T>t w. Small (1982)
defines variable to measure how early or late this is: schedule delay early (SDE) is defined as t w (t h +T) if the commuter is early, and zero otherwise; while schedule delay late (SDL) is (t h +T) -t w if
the commuter is late and zero otherwise. This scheduling cost function C s , is postulated as follows:
C s = T + ( SDE ) + ( SDL) + PL

(1)

Where D L is equal to 1 when SDL 0 and 0 otherwise. The coefficient is the cost of travel time,
and and are the cost per minute of arriving early and late respectively, and is an additional
discrete lateness penalty.

The theoretical model of Noland and Small (1995) is considered an extension of both Gaver (1968)
and Polak (1987) coupled with Small (1982). It therefore accounts for travelers choice of
alternative departure times and changing congestion levels. Therefore, this model allows for
decomposition of morning commute which are the expected cost of schedule delay, lateness and
travel time. The model is derived as:
EC s = E (T ) + E ( SDE ) + E ( SDL) + PL

(2)

Where E(T) is the expected travel time, E(SDE) is the expected schedule delay early, E(SDL) is the
expected delay late, and P L = E(D L ) is the lateness probability. Given a specific probability
distribution function for the uncertain component of travel time T, this formulation enables the
analyst to predict a head start time that the traveler will choose and the resulting value of the
expected scheduling cost. Increased variability in travel time T will increase this expected cost
because it will increase one or more of the last three terms, the exact mix depending on how the
traveler responds in altering the head start time.

- 32 -

Approaches to Defining Reliability for Valuation Studies

Mean-Variance
Unreliability is measured as the standard deviation (or variance) or other measure of dispersion
from the travel time distribution. It is assumed that a decision-maker's objective is to minimize the
sum of two terms (both assumed to be sources of disutility): expected travel time, and the travel
time variability. While the standard deviation is the most common measure of reliability used in
past studies, others have been used as well. These include the interquartile range and differences
of percentiles (e.g. 90th percentile and median, 80th percentile and the median). The median has
been used to represent the average condition as well.

This approach allows the estimation of the Value of Travel Time Reliability (VOR) (also referred
as the Value of Travel Time Variability). This value represents the travelers' monetary weight for
reducing variability (i.e. improving reliability). In addition, the Reliability Ratio is defined as the
ratio of the value of travel time reliability, and the value of travel time (VOT). 35 This ratio permits
estimation of the Value of Reliability, especially when only the Value of Travel Time is known. 36

AF

Agreement on the most appropriate dispersion measure would benefit application of this
approach. However, the dispersion measures assume different types of traveler behavior. If the
standard deviation or the interquartile range is used, it is assumed that travelers value both early
and later arrivals equally (since the standard deviation covers both sides of the mean.) If the
dispersion measure covers only the right side of the travel time distribution (e.g., the 80th percentile
minus the median), then it is assumed that travelers only value lateness.

A potential problem with the mean-variance approach relates to how it is developed with stated
preference or revealed preference surveys (covered in the Section 4.3). If the overall mean time is
used as the indicator of typical or usual conditions (for the VOT), then it will include a portion of
the variability component. This can lead to double counting benefits when applied. Since the travel
time distribution is skewed, using the median instead of the mean can help to control for this, which
would be helpful in revealed preference studies where the travel times can be established with field
data, but adjusting for it in stated preference studies is more problematic.
Scheduling Delays (with Variability)

In this approach, it is assumed that travelers define their own version of a schedule (arriving on
time at a destination) and adjust their departure times, routes, and modes accordingly. In the
scheduling delay approach, early arrivals can be valued differently than late arrivals. Reliability
and scheduling are related concepts. The former refers to the disutility of the inconvenience and
possible penalties attributed to the unreliability of travel times. The latter refers to the disutility of
arriving either too early or too late, when the traveler has time restrictions (e.g. inflexible vs.
flexible schedules).

Recent research has shown equivalence (under certain conditions) between mean-variance and the
scheduling delays model (see Fosgerau and Karlstrom (2010)), and also the focus has shifted to
heterogeneity, and risk attitudes. Other important contributions are in terms of time-varying
early/late penalties (see Tseng and Verhoef (2008), and Fosgerau and Engelson (2011)). Also, time35 More formally, the Reliability Ratio is the value of a time savings in reliability (e.g., one minute of standard
deviation saved), divided by the value of average travel time savings (e.g., one minute of usual or average
travel time saved).
36 Transportation Benefit-Cost Analysis

- 33 -

varying early/late penalties for chained trips is developed in Jenelius et al (2011). Noland and
Polak (2002) offer the following observation:

While [our] analysis suggests an equivalence of the two theoretical approaches

(scheduling models versus the mean-variance approach), it appears that in most
cases, the scheduling cost formulation captures more of the behavioural reactions of
travellers. This hinges to a large extent on the value of the coefficient associated
with the probability of late arrival and the time varying nature of recurrent
congestion. There may be benefits in combining both approaches. One could specify
a schedule delay model that includes an additional term that also captures disutility
associated with variability independent of scheduling concerns. Empirical studies
have examined this and we discuss these results below.

Theoretical considerations aside, there are also practical differences between the mean-variance
and scheduling approaches. As the name implies, the scheduling approach requires knowledge of
travelers schedules and the distribution of their associated arrival times, items which are usually
not available in when forecasting travel conditions.

AF

Research Methods Used

Survey-Based Methods

Econometric analysis favors use of observation data which relates to observed choices usually,
called revealed-preference (RP) data. This data technique underpins early studies in travel time
valuation. However, there are numerous problems associated with finding real choice situations
with adequate variation to yield very detailed reliable estimates (statistically). The above outlined
problems led to an interest in the use of hypothetical choice data, generally called the statedpreference (SP). In SP experiments, respondents are asked to state or indicate (paper or webbased) their preference for route choices with various attributes. The attributes include drive time,
congestion, and travel time variability. SP has become the predominant data technique used in most
studies relating to valuation of travel time saving and travel time variability.

Ghosh (2001) and Yan (2002) show that median SP estimates of VOT and VOR are about half the
median estimates of RP and the difference is statistically significant. Also, Shires and de Jong
(2008) show that SP and joint SP/RP studies produce significantly lower value of travel time
savings for commute and other passenger travels. Brownstone and Small (2003) hypothesize that
the significant difference between SP and RP estimates may be attributed to exaggeration of travel
time losses in RP data due to relatively high stress in high congestion.
There are few concerns with SP based studies. This relates to presentation of reliability attributes
in the experiment. There is little agreement on the presentation format for SP experiment. The
presentation of the attributes in the survey could lead to varying interpretation by respondents.
This could lead to incorrect answers to the survey questions. Additionally, values placed on
punctuality, early arrival or late arrival by researches could be may not reflect the true population
values. These values are sometimes difficult to convey in an SP experiment.

Options Theoretic Approach

- 34 -

(NOTE: the following is a discussion of an approach developed in SHRP 2 Project L11, Evaluating
Alternative Operations Strategies to Improve Travel Time Reliability. The discussion is taken directly
from a working paper for SHRP 2 Project L17. 37 This approach is a radical departure from past
reliability valuation research and to date is the only one of its kind. One U.S. transportation agency
has adopted this approach for valuing reliability.) 38

Well-established techniques exist in economics for estimating the value of an

opportunity whose future value is not known with certainty, but can be described in
terms of probabilities. A person can purchase an option that gives them the right to
exercise an opportunity (e.g., to buy or sell something) at a specific point in time, or
up to a specific point in time, depending on the type of option. A car insurance policy
is an example of an optionone pays an insurance premium to obtain the
opportunity to guarantee that one will avoid paying a significantly larger sum in the
unlikely event of an accident. So-called real options involve the analysis of things
that are not readily traded.

AF

Continuing with the insurance- theme, one can, for example, purchase insurance
that a communications satellite will perform at a certain level for a certain period of
time, or that one will be covered for unexpected travel expenses due to being
delayed as a result of sickness, volcanic eruptions, etc. One can theorize that, if such
a product were available, motorists would be willing to pay a premium for travel
time insurance to compensate them for travel times exceeding a guaranteed level.
As this insurance is hypothetical and would involve compensation for time loss
rather than a direct monetary loss, it can be considered a type of real option.

The value of hypothetical travel time insurance represents the reduced,

guaranteed speed that motorists would be willing to accept in exchange for
insurance that speeds would never fall below the guaranteed value. Instead of
paying the premium with money, the premium is paid in the form of travel time.
Under unreliable conditions, motorists would experience a mean travel speed x and
would risk that their travel time might occasionally be very long.

With travel time insurance, motorists would be provided with a reduced,

guaranteed minimum speed of y (y<x). The difference in speeds between the risky x
and the guaranteed y can be converted to an increased travel time over the study
roadway (i.e., the insurance premium); this travel time can then be converted into a
monetary value based on an assumed value of time.
The mathematics of determining this value is derived from options theory in
economics. For typical applications, the guaranteed speed is taken as the mean
travel time and the length of the option period (insurance policy) is taken as the
travel time required to travel the length of the roadway facility at the lowest 1%
speed. For rare-event applications, the variable used for the guarantee could be
event duration or the number of events during the life of the project.

APPENDIX C
37
38

Kittelson and Associates, 2012

Puget Sound Regional Council, 2010

- 35 -

Summary of Research on the Passenger Value of Reliability

Passenger Travel
Table C1 summarizes several of the past research studies on the value of reliability for passenger
travel. The emphasis is on showing the Reliability Ratio and the reliability definition in each study.
Several recent summaries of past research on the valuation of reliability for passenger travel have
assessed these studies:
The aforementioned white paper from SHRP 2 Project L17 39
An unpublished review conducted for SHRP 2 L05
A Florida DOT Research Report 40
A forthcoming TRB paper publication by Carrion and Levinson41

Table C1. Past Research on the Value of Reliability: Passenger Travel

Study Type

Reliability Ratio
(personal auto use)

Reliability Metric/Definition

AF

Authors
Brownstone and Small (2003)

RP/SP

1.18

90th - 50th Percentile

RP

1.17

90th - 50th Percentile

Li, Hensher, and Rose (2010)

SP

0.70

Borjesson (2008)

SP

1.27

Small et al. (1995)

SP

2.30

Standard deviation

Small et al. (1999)

SP

2.51

Standard deviation

Small, Winston, and Yan (2005)

RP

0.91

75th - 25th Percentile

Levinson and Tilahun (2008)

SP

0.89

90th - 50th Percentile

Carrion and Levinson (2010)

RP

0.91

90th - 50th Percentile

Ghosh (2001)

Scheduling approach; standard

deviation
Ratio of sensitivity to standard deviation
to sensitivity of the mean

De Jong et al. (2007)

SP

1.35

Standard deviation

Forsgerau et al (2008)

RP

1.00

Standard deviation

RP/SP

0.97

Yan (2002)

SP

0.98

RP/SP

0.26

Senna (1993)

SP

0.76

Black and Towriss (1993)

SP

0.55-0.70

Asensio and Matas (2008)

Bhat and Sardesai

Tilahun and Levinson (2007)

Tseng, Ubbels, and Verhoef (2005)

SP

1.0

SP

0.5

90th - 50th Percentile

Scheduling approach; standard
deviation
Scheduling approach; standard
deviation
Standard deviation
Standard deviation
Scheduling approach; difference
between actual late arrival and usual
travel time
Scheduling approach; difference
between early/late arrival time and
preferred arrival time

Kittelson and Associates, 2012

Concas et al., 2009
41 Carrion and Levinson, 2012
42 An earlier version of this work used the difference in the 80th and 50th percentiles.
39
40

- 36 -

42

Study Type

Reliability Ratio
(personal auto use)

Reliability Metric/Definition

Koskenoja (1996)

SP

0.75

Average schedule delay (late and early)

SHRP 2 C04 (Pub. Pending)

RP

0.7-1.5

Standard deviation per unit distance

SHRP 2 L04 (Pub. Pending)

RP

0.57-2.69

Standard deviation per unit distance

Authors

Of these, the Carrion and Levinson work is the most comprehensive. The reviews were all intended
to determine reasonable values for VOR and the Reliability Ratio, in addition to critiquing the
theoretical basis of the studies and their methodologies. (Carrion and Levinson went as far as to
conduct a formal meta-analysis, though they found it inconclusive.)

AF

Figure C2 is taken directly from Carrion and Levinson. They were selective in their choice of
studies as they were using them for a meta-analysis. It is interesting that the more recent studies
show less variation between them, and if the means of each individual study is used, the reliability
ratios are grouped in the 0.5 1.5 range. Previously, SHRP 2 Project C04 also noted the same range.
The SHRP 2 L05 effort more narrowly focused the Reliability Ratio range to 0.9 1.25 based on
including only the research with the most rigorous methods. The FDOT study recommended a
Reliability Ratio range of 0.8 1.0, based on their assessment of the most rigorous studies. 43 Tseng
(2010) conducted a meta-analysis of past studies and found that SP-based studies produced lower
estimates of the Reliability Ratios than those based on RP methods: 0.9477 versus 0.6375.
The reliability information garnered from surveys can be used effectively in travel forecasting
procedures. For example, SHRP 2 Project C04, Improving Our Understanding of How Highway
Congestion and Pricing Affect Travel Demand, developed a conceptual utility function for traveler
choices that includes reliability (defined by the standard deviation):
U= a + b MedianTime + c Cost/(Inc e Occ f )+ d SDevTime/Dist + .

a is a an alternative-specific bias constant for tolled facilities

Where:

b is the travel time coefficient, ideally estimated as a random coefficient to

capture residual heterogeneity
MedianTime is the median, typical expected, travel time by auto

c is the monetary cost coefficient

Cost/(Inc e Occ f ) is the monetary cost, scaled by power functions of both

income and vehicle occupancy
d is the reliability coefficient

And:

SDevTime/Dist is a measure of travel time reliability, specified as the day-today standard deviation of the travel time by auto, divided by distance
Value of Time, VOT = b/c

Value of Reliability, VOR = d/c

Reliability Ratio, VOR/VOT = d/b

The authors also mentioned that the value could be as much as three times higher if strict schedule
adherence is required for the trip.
43

- 37 -

AF

Figure C2. Reliability Ratios from Previous Studies

Source: Carrion and Levinson

Many non-U.S. countries have undertaken their own review of the issue and have recommended
specific values for VOR and/or the Reliability Ratio. Kauppila provides an excellent summary of
these: 44
Netherlands: Reliability Ratios of 0.8 and 1.4 for personal auto and public transit,
respectively. (Being updated; United Kingdom may adopt the updated number.)
New Zealand: Reliability Ratio of 0.8 for personal autos
Australia: Reliability Ratio of 1.3 for personal autos
Sweden: Reliability Ratio of 0.9 for all trip types
Canada: Transport Canada study recommended a Reliability Ratio of 1.0

It must be noted that using a single (composite) Reliability Ratio in technical analyses may be
misleading. Researchers have noted that just as for the VOT, the VOR can vary by a number of
factors. SHRP 2 Project C04 found that the Reliability Ratio varies as a function of trip type
(work/nonwork) and income level. SHRP 2 Project L04 extended this work and derived an
expansive set of Reliability Ratios for combinations of trip type, income, and trip length. In general,
the influence of these factors is:

44

Trip type the Reliability Ratio for the trip to work is higher than the trip from work or
nonwork trips.

Kauppila, 2011

- 38 -

Income for the work trip, lower income groups have a higher Reliability Ratio
(presumably because their work schedules are more rigidly fixed by employers).
Trip length for the work trip, the Reliability Ratio decreases with trip distance.

The International Transport Forum made similar observations in a recent publication: 45

AF

A range of reliability values is required to reflect the different major user groups. It
is difficult to generalise about the value of reliability as it will be project, location,
user, and time-specific. For one project studied, the value of improvements in
reliability were found to be negligible, whereas for another project they were found
to add 25% to the welfare benefits of time savings achieved. It is important to
recognise the importance of disaggregating user values of reliability the
granularity of reliability. Different values are placed on reliability by different
network users at different times and for different trip purposes. Therefore, a single
monetary value for reliability will be of little, if any, use in project appraisal.
Practitioners cannot assume that values used in one study are readily transferable
to a project in another situation. It is also important to avoid potential doublecounting when factoring reliability into project assessment. This can arise if the
standard values of time used to assess average time savings already have an
implicit, crude value for reliability incorporated in them.

45

International Transport Forum, Policy Brief: Seamless Transport, April 2012.

- 39 -

APPENDIX D
Summary of Research for Freight Value of Reliability
Freight Travel

Studies on the valuation of freight reliability are not as prevalent as for passenger travel. A review
of several relevant studies follows. These studies indicate that the value of reliability varies by
commodity, with bulk commodities having the lowest value. However, as Hamer et al. (2005)
noted, there is little consensus on what the values of VORs or Reliability Ratios should be. It is true
that for highways, the VOT for freight (trucking) is higher than for personal auto use. For example,
FHWAs Highway Economic Requirements System (HERS) model uses a $19.86 VOT for autos and a
$36.05 value for combination trucks (2006 dollars). If the Reliability Ratios for freight are
equivalent to passenger travel, i.e., around 1.0, then VOR for freight will be higher.

AF

De Jong et al (2004), New Values of Time and Reliability in Freight Transport in the
Netherlands. Research Project carried out for AVV (Transport Research Centre) of the Dutch
Ministry of Transport.
Sample size, geographic area, data used: Type of data and year collected. Data was collected
through interviews and survey. The survey comprised both stated and revealed-preference. A total
of 435 shippers and freight carriers in the Netherlands participated in the study.

Estimation Model, variable used: Standard and mixed logit models, Jacknife method. Variables
used include transport cost ( rates for shippers that contract out activities to carriers), door-to-door
transport time, percentage not delivered on time, probability of damage and frequency of shipment.

Results:
Values of reliability
Road transport for low value raw materials and semi-finished goods = 1.01 Euro per
shipment;
Road transport for high value raw materials and semi-finished goods = 1.31 Euro per
shipment;
Road transport for final goods with loss of value = 2.67 Euro per shipment;
Road transport for final goods without loss of value = 2.51 Euro per shipment;
Road transport for containers = 2.85 Euro per shipment
Road transport for total freight transport = 1.77 Euro per shipment;
Train = 898.081.31 Euro per shipment
Inland waterways barge = 62.53 Euro per shipment;
Sea ship (short and deep sea) = 930.60 Euro per shipment
Aircraft = 15429.36 Euro per shipment.

The above values of reliability measures are associated with 10% change in reliability (measured as
the percentage not delivered on-time). Unlike Small et al (2005), this study does not categorize by
its time sensitivity. Agricultural products are time sensitive while say, consumer electronic
products are not. Therefore each of these freight, though they may travel by road, have different
values associated with travel time reliability. Unlike passenger, value of reliability associated with
freight transport comprises the likelihood of loss of value of freight, increased transportation cost
- 40 -

and higher inventory level. Although the authors mentioned it is not clear from the study, the
contribution of each of these components in the estimation of the aggregate value of reliability.
Consequently the above values of reliability shall be considered as average values of reliability for
perishables and non-perishables and by mode.

Fowkes A.S (2007), The design and interpretation of freight stated-preference experiments
seeking to elicit behavioral valuations of journey attributes.

Sample size, geographic area, data used: Type of data and year collected. Data was collected
through the Leeds Adaptive Stated-preference (LASP) survey. The LASP is a computer-based
survey that shows respondents screen containing several alternative ways of moving their goods. A
total of 49 interviews were conducted with transport managers between September 2003 and
February 2004. The survey provided respondents with four alternatives comprising road and rail,
but these were not detailed in the study.
Estimation Model, variable used: Manual method and weighted regression analysis of logit.
Variables include cost, on-time reliability, damage risk, security risk, shipment distance.

AF

Results: The author indicates that estimated values for reliability ranges between the value of time
and twice those values. Therefore, the recommended values for reliability for the whole sample,
and the Bulks and Non-bulks are set double those for the value of time. Sample size of 49 is
relatively small. Based on the Central Limit Theorem (CLT), the results could be improved if higher
survey participation had been solicited. Additionally, the study is biased towards bulk goods.
Although, value of reliability was estimated for non-bulks, there was no detail as to which nonbulks were applicable. Also the study did not separately value reliability by mode. The above
reliability values are applicable to bulk freight.
Fowkes, Firmin, Whiteing Freight road users valuations of three different aspects of delay.

Type of data and year collected. Data was collected through the Leeds Adaptive Statedpreference (LASP) survey. The LASP is a computer-based survey that shows respondents screen
containing several alternative ways of moving their goods. A total of 40 interviews were conducted
with transport managers between September 2003 and February 2004. The survey provided
respondents with four alternatives comprising road and rail, but these were not detailed in the
study.

Estimation Model, variable used: Manual method and weighted regression analysis of logit.
Variables include cost, on-time reliability, damage risk, security risk, shipment distance.

Results: Values of reliability

Table D1.

Category

VDT
N

VSP

VSH

p(0.01)/min

p(0.01)/min

p(0.01)/min

Whole sample

40

107.1

85.3

65.8

Own account

11

169.1

89.5

126

Third party (carrier

19

155.1

167.6

86.8

- 41 -

interviewed)
10

37.2

61.5

31.3

Distribution

25

183.6

128.7

104.2

Not distribution

15

76.2

56.9

47.7

J.I.T/QR

27

128.6

101.8

75.9

Not J.I.T/QR

13

61

46.8

25.6

Articulated

33

98.4

90.2

63.4

Not articulated

126.6

78.1

74.7

Distance Less Than 250 km

14

89.9

93.8

59

Distance Greater Than 250 km

26

125

74.5

74.1

Chemicals, Chem. Products,

Paint

224.7

126.6

94.3

Food, Drink, Grocery

15

90.9

77.5

48.4

Other Commodities

17

145.7

93.3

97

Rail Possible

13

77.9

60.4

56.3

Rail Not Possible

27

120.5

96.2

69.6

Daytime Movement Only

32

97.3

72

61.4

Some Night Time Movement

431.5

159

173.9

North East Interviewer

18

50.5

104.7

49.2

Huddersfield Based
Interviewers

22

131.4

80.3

80

AF

Third party (shipper

interviewed)

VDT = Value of Delay Time

VSP=Average arrival spread
VSH = Schedule Delay

VDT is the delay resulting from an increased journey time, with fixed departure time, VSP is the
increase in the spread ( or range ) of arrival times for a fixed departure time and VSH is a schedule
delay where the departure time is effectively put back.

Bolis and Maggi, Adaptive Stated-preference Analysis of shippers transport and logistics
choice.

Sample size, geographic area, data used: Type of data and year collected. Data collected was
based on the Leeds Adaptive Stated-preference (LASP) survey. The LASP is a computer-based
survey that shows respondents screen containing several alternative ways of moving their goods.
Transport and logistics managers (rail) of four firms transporting two commodity groups were
surveyed for the study. The survey provided respondents with three alternatives comprising, but
were not detailed in the study.

- 42 -

Estimation Model, variable used: The authors modeled the study using the transport and
logistics services as a production function and conceived the firm as a network.. Variables include
transport (cost, time and reliability and mode) and logistics (frequency and flexibility).

Results:
Sector: chemical, production company, and client both operate JIT, serves client in regional market;
value of reliability is Lit 39,008 per hour.
Sector: chemical, production company, serves client in foreign market; value of reliability is Lit
5,066 per hour.

Sample size of four is too small to yield results that are representative of the population.
Additionally, the four firms represent two only two sectors.

Bergkvist Erik, Regional valuation of infrastructure improvements. The case of Swedish road
freight.

AF

Sample size, geographic area, data used: Type of data and year collected. Data was collected
through computer-based stated-preference survey in Sweden in 1992. 277 companies participated
in the survey. Companies with less than 10 employees were excluded from the survey. The survey
was designed to enable researchers construct a model to forecast companies choices between
trucks and other modes based on their attributes.

Estimation Model, variable used: Logit models.. Variables used included:

Door-to-door travel time;
Transport cost;
Percent deviation from arrival time (on same day);
Percent deviation from arrival time (on wrong day);
Per mileage damage.

Results:
The study estimated value of time to be 14 SEK and the variance of 22.7SEK.

The composition of the companies by industry is unknown. Therefore the above values would be
considered average for freight movements. Therefore RR, defined as ratio of value of travel time
reliability to value of travel time is estimated to be 1.62.

Danielis R., Marcucci E., Rotaris L, Logistics managers stated-preference for freight services
attributes.
Sample size, geographic area, data used: Type of data and year collected. Data was collected
through computer-based stated-preference survey. 65 manufacturing firms of different sizes
participated in the survey. 35 firms are located in Fruili Veneza Giulia, northeast of Italy bordering
with Austria and Slovenia, while the remaining 30 firms are located in Marche, a region in the
center of Italy. The survey is a computer-based survey powered by the adaptive conjoint analysis
(ACA) software. The first of the two part survey collects generate information about the firm. The
second part collects information about a typical transport relation on the input and out sides of the
company. The ACA software assigns a utility to responses provided by survey respondents.
- 43 -

Estimation Model, variable used: following assignment of utilities by the ACA software, ordered
probit model was used to model choice of alternatives (road vs. rail). A logit model was first tested
but did not provide desirable results. Consequently, additional data were collected in 29
experiments. A fixed effect ordered probit model was estimated. Variables used included cost,
travel time, travel time reliability and damage cost
Results:
Value of time (VOT) = 7.1 Euro per hour

Value of reliability (VOR) = 9.7 Euro per hour

AF

The study is biased towards the manufacturing sector and the associated value of time and
reliability is ridiculously low. Most manufacturing firms are engaged in JIT operations, thus making
delivery of input materials and in some cases output materials time sensitive. Therefore an hour of
delay in input materials should be in excess of 9.7 Euro. Considering that the hourly wage of a Bus
Driver in Italy is 36 Euro (2005), an hour of delay of shipment must be in excess of 36 Euros. It is
possible that the firms surveyed manufacture low value goods, do not operate JIT or their clients do
not operate JIT. The study did not differentiate between reliability values for durable and nondurable goods.
Wigan et al., Valuing Long Haul and metropolitan Freight Travel Time and Reliability.

Sample size, geographic area, data used: Type of data and year collected. Data was collected
through paper-based contextual stated-preference (CSP) survey in Australia In CSP survey, un
underlying conjoint design ensures that no alternative is either clearly preferred or inferior to all
the others. 43 people. Data was collected on three market segments: Inter-capital full truck load
(FTL), Metropolitan FTL and Metropolitan multidrop. And survey respondents were drawn from
automotive parts, food and beverages, certain building materials and packaging.

Estimation Model, variable used: NLOGIT, a component of Limdep 7 software was used to
analyze the survey. Variables used included travel time, cost, travel time reliability and damage.

Results:

Table D2. Freight Travel time implicit unit values (in 1998 $ AUD)
Segment
Freight travel time
Reliability
Inter-capital(FTL)
$0.66 pallet/hour
$2.56 per 1% reduction
Urban (FTL)
$1.30 pallet/hour
$1.25 per 1% reduction
Metropolitan multi-drop
$1.40 pallet/hour
$1.97 per 1% reduction
From the result, inter-capital market segment has the least hourly value of time. However it is
associated with the highest reliability value. The results show that businesses are willing to pay
AuS$2.56 to reduce travel time by one percent.

- 44 -

APPENDIX E
Incorporating Travel Time Reliability in Travel Demand Forecasting:
SHRP 2 Project C10B
Project C10B has developed a method for including reliability in its analysis framework. As of this
writing, it has yet to be tested, but the same structure can be used in other applications. A
description of this method follows.

As an input, reliability affects travelers decisions about trip-making and the choice of destination,
mode, and route. It can be thought of as an extra impedance to travel over and above the average
travel time generally used in demand models. Note that current models definition of average travel
time is based solely on recurring (demand and capacity) conditions. Considering reliability means
that nonrecurring sources of congestion factor into the process.

AF

The concept of extra impedance due to unreliable travel is probably the best way to incorporate
reliability into the modeling structure as an input. SHRP 2 Project L04 is using this approach where
the impedance on a link can be captured as a generalized cost function that includes both the
average travel time and its standard deviation (which is used as the indictor of reliability).
Therefore, L04 functions will be used to establish the total link impedance for trip distribution and
assignment purposes, if they become available in time. If not, the use of Travel Time Equivalents
will be used, as discussed below.
In order to apply this method, a method must exist for predicting the standard deviation of travel
time. SHRP 2 Project L03 developed such methods from empirical data, using the Travel Time
Index (TTI) as the dependent variable.
Urban Freeways 46

95th %ile TTI = 1 + 3.6700 * ln(MeanTTI)

90th %ile TTI = 1 + 2.7809 * ln(MeanTTI)

(2)

80th %ile TTI = 1 + 2.1406 * ln(MeanTTI)

(3)

50th %ile TTI = MeanTTI0.8601

(4)

StdDevTTI= 0.71*(MeanTTI - 1)0.56

(5)

D
46

(1)

TTI is the ratio of the actual travel time to the ideal or free flow travel time

- 45 -

Signalized Arterials
95th Percentile TTI = 1 + 2.6930 * ln(MeanTTI)
80th Percentile TTI = 1 + 1.8095 * ln(MeanTTI)
MedianTTI = MeanTTI0.9149
StandardDeviation = 0.3692 * (MeanTTI 1)0.3947

(6)
(7)

(8)

(9)

MeanTTI is the grand (overall) mean since it was developed from continuous detector data it
includes all of the possible influences on congestion (e.g., incidents and inclement weather). Most
applications and models that predict mean travel time, speeds, etc., almost always only consider
recurring congestion. Therefore, an adjustment must be made to the recurring-only travel time so
that it corresponds to the overall mean:
OverallMeanTTI = 1.0274 * RecurringMeanTTI1.2204

OverallMeanTTI is the MeanTTI in the predictive equations 1-8

AF

Where:

(10)

RecurringMeanTTI is the mean TTI that considers recurring sources only.

One adjustment needs to be made in Equation 10. The definition of recurring was based on times
when no disruptions were present (incidents, weather, and work zones). It does include the effect
of variable demands from day-to-day. If an estimate of the RecurringMeanTTI from a traffic model
is based on typical or average conditions, then this effect it would need to be adjusted (factored up)
to meet the definition used in Equation 10. If an estimate of the RecurringMeanTTI is based on
something like the 30th highest hour concept, then demand variability is implicitly handled.

A better method of estimating MeanTTI (the overall mean that includes both recurring and
nonrecurring sources) is to use the simulation model (DynusT, in the case of Project C10B) output
to calculate recurring delay, make an independent estimate of incident delay, then combine the two.
The steps are:
1. Compute the recurring delay in hours per mile from the simulation model:
RecurringDelay = AverageTravelRate (1/FreeFlowSpeed)

(11)

2. Compute the delay due to incidents (IncidentDelay) in hours per mile using the lookup
tables from the IDAS User Manual 47. This requires the v/c ratio, number of lanes, and length
and type of the period being studied (e.g., 2-hour peak period).

3. Compute the Overall Mean Travel Time Index which includes the effects of recurring and
incident delay:
MeanTTI = (RecurringDelay + IncidentDelay) / (1/FreeFlowSpeed)

Note that since the L03 equations predict the TTI; the travel time can be computed as:
47

(12)

IDAS Users Manual, Appendix B, Tables B.2.14 B.2.18, http://idas.camsys.com/documentation.htm

- 46 -

TravelTime = TTI * FreeFlowSpeed

(13)

As of this writing, coefficients for the reliability utility function have not been developed by Project
L04. An alternate method would be to compute travel time equivalents for reliability. For this
purpose, we recommend using empirical results developed by Small, Winston, and Yan 48. They
defined unreliability as the difference between the 80th percentile travel time and the 50th
percentile travel time and found the value of unreliability to be approximately equal to the value of
time.
Based on this result, we recommend the following equation to calculate travel time equivalents for
a trip:

TTE is the travel time equivalent on the link

MTT is the mean travel time (min)

AF

Where:

(14)

TTE = MTT + a * (80th%TT 50%TT )

a is the Reliability Ratio (assumed value is 1.0)

80%TT is the 80th percentile travel time (min)

50%TT is the 50th percentile travel time (min)

MTT, 80%TT, and 50%TT are computed as shown in Appendix B. The a parameter reflects the
value of unreliability relative to mean travel time (based on currently available information, we
recommend a value of 1.00 for this parameter but this value may be revised based on future
research).

TTE is then used as a replacement for the average travel time in the feedback loop to the activity
model it is basically an inflated value of travel time over the average that accounts for how
travelers value reliability. How the activity model which was calibrated using average travel time
will behave with this inflated travel time value is unknown and will be the subject of testing.

The above completes the input (demand) side of reliability inclusion. To produce estimates of the
economic impact of reliability, the following procedure is proposed:

Compute total equivalent delay based on the TTE:

TotalEquivalentDelay = (TTE - FreeFlowTravelTime) * VMT

(15)

Delay may be decomposed into passenger and commercial portions using different travel
time equivalents and VMT values.

48

Small et al., 2005

- 47 -

Value delay with the usual unit costs for the value of (average) travel time applied to the
travel time equivalent. The adjustment for reliability has already been made.

Adapting/Extending the C10B Procedure

AF

The methods used in the C10B procedure can be replaced by other analytic methods as they
become available. For example, if the analysis deals with an extended highway segment, the Project
L08 procedure, when it becomes available, can be used to estimate reliability directly without
having to apply the Project L03 and IDAS equations. The FDOT reliability prediction method could
also be substituted for the L03 and IDAS equations. Utility functions, such as those being explored
in Project L04, that directly accommodate reliability can be used in place of the travel time
equivalents approach.

- 48 -