Is generalised cost justified in travel demand analysis?

Abstract

Generalised cost (GC) has long been widely used as a measure of the attractiveness of travel alternatives. We argue that its limitations have been forgotten, overlooked or not appreciated, and it is used because 'it has always been used'. We explore the relationships between GC and its components (price, time, value of time) and their respective demand elasticities and show that the variation of component elasticities over time and space is not consistent with the variation implied by a GC formulation. We therefore conduct detailed tests of whether the GC approach is justified. The datasets used are recorded ticket sales between pairs of railway stations for a number of years and covering a variety of types of flow. When restricted to a GC formulation, we find that allowing VoT to be estimated as part of the modelling process is greatly superior to using either the UK official VoTs or using VoTs from meta-analyses. We conclude that the importance of using the correct VoT in calculating GC cannot be overstated. Failure to do so will lead to incorrect derivation of component elasticities from the GC elasticity. A more flexible approach estimating elasticities to components of GC is better than even the best GC formulation. We conclude that robust models, with large sample sizes and very precise coefficient estimates in their standard form, are not able to support the variation in GJT and fare elasticities that would be implied by the GC approach. It might be time to stop using GC.

The demand impacts of train punctuality in great britain: systematic review, meta-analysis and some new econometric insights

“…It also finds that if an enhanced GJT approach is to be used, then the late time multipliers used to create it should be directly estimated and are much lower than suggested by prevailing evidence invariably drawn from SP studies. We note that this is in line with the findings drawn by Wardman and Toner (2020) in the broader context of generalised cost and the value of time used to create it. There are obvious implications for modes which cannot directly estimate 'behaviourally consistent' late time valuations.…”

Framework for the Analysis and Enhancement of the Accessibility of Large-Scale Urban Transit Networks: A Data-Driven Study for the City of Lyon, France

“…For example, an accessibility of 4 corresponds to four points of interest that can be reached from our point of origin in a given temporal window. We have chosen to limit ourselves to travel time only, because taking into account a generalized cost would introduce other variables such as the value of time, which we have deemed irrelevant for the same reasons mentioned above and the difficulty of accurately calculating the value of time for individuals ( 20 ). This assumption excludes individuals’ preferences for a minimum number of connections and their tendency to minimize their walking time in favor of motorized transport ( 18 ).…”

Investigating Demand Models With More Flexible Elasticity Functions: Empirical Insights From Rail Demand Analysis

“…This function allows the GJT and fare elasticities to depend upon the proportion that their variables form of GC to the extent that is empirically warranted. Wardman and Toner (2020) did allow the GJT and fare elasticities to vary respectively with categories of Π 𝐺𝐽𝑇𝑖𝑗 and Π 𝐹𝑖𝑗 but did not estimate the continuous function of equation 20.…”