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Appendix B | Measuring congestion costs

Table B1 Austroads value of time for different vehicles

Vehicle

Private vehicles

Business travel

2-axle rigids

6‐axle artics

Value of time

$9.23 per person‐hour

$29.52 per person‐hour

$22.41 per hour

$48.51 per hour

Source: Austroads (2006a, Table 8, p. 12).

Despite the academic interest in this issue, there is no simple answer. However, there

is general agreement that there is no unambiguously correct figure for the value of

time and that there are gains from the consistent application of agreed values, such

as in Table B1.

The success or failure of congestion charging projects will often be determined by the

value attributed to the time saved. While proponents of the London scheme regard

it as an economic success, other analysts have labelled it as an economic failure—a

‘mini-Concord’—because it recovers only 60 per cent of its costs (Prud’homme and

Bocarejo 2005). The value assigned to time is a key factor in the discrepancy between

the disparate conclusions.

Network unreliability

While the time lost in congested traffic is an important element of the costs of

congestion, the unreliability of travel time due to the unpredictable nature of

congestion, is also a major issue. Indeed, the ECMT suggests that the volume of

evidence points to reliability as being more important than travel time and speed

(ECMT 2007, p. 37). As noted in the Technical Report, Paying for Road Use:

… congested roads are sensitive to small disturbances. So congestion results not only

in delays but in uncertainty as to how long journeys are going to take. That causes

problems and costs, often because people need to leave early to make sure they get

to their destination on time (CfIT (UK) 2002a, p. 9).

There can be a random element to network unreliability, due to accidents and

poor weather conditions. In Britain, it has been estimated that around a quarter of

congestion is unpredictable, contributing to unreliable travel times.

It is difficult to quantify the cost of increased network unreliability due to congestion.

Unreliability itself is generally measured as the standard deviation in travel time.

However, translating this to a cost is not straightforward. Unreliability leads to

uncertainty surrounding travel times, requiring extra travel time as a ‘buffer’. In Britain,

network unreliability is estimated to increase operating costs of freight vehicles by

five per cent (CfIT (UK) 2002a, p. 12).

Modelling of the impact of congestion charging in London produced improvements

in journey time reliability between 20 and 30 per cent of time savings (between £10 and

£20 million compared to between £40 and £65 million a year) (CfIT (UK) 2002a, p. 14).

The contribution of network unreliability to the costs of congestion is yet to be

widely applied in international studies. Australian estimates indicate that social cost

of congestion based only on travel time and excluding costing for unreliability, extra

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