In the setting of Los Angeles’s ExpressLanes, we uncover the distribution of individuals’ preferences for time savings in a novel application of a hedonic pricing model. We introduce the concept of the value of urgency, defined by willingness to pay (WTP) a toll to avoid a congested alternative route. The value of urgency does not scale in the amount of time saved, reflecting discrete penalties for late arrival. This value accounts for 87% of total WTP to use the ExpressLanes, while the contributions to WTP from other widely used valuation measures are negligible. We suggest that quality-of-service pricing that varies in real time and removes uncertainty over travel times creates new markets for individuals to reveal their preferences for urgency.
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Bento et al. (2024) studied this question.
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