HOT lane study points to importance of reliability over average delay

By Eric Sundquist

A new University of Minnesota study on driver behavior in managed lanes provides some findings that on the surface seem highly counter-intuitive, but that may have a simple explanation: travelers care more about reliability than delay.

The study looked at prices and usage of managed lanes in the Twin Cities. The first surprising result is that travelers were willing to pay large tolls to access HOT lanes. In its demand modeling, MnDOT assumes a value-of-time for travelers of $15.60 per hour. But with average time savings on the study corridors ranging from just 0.8 minutes to 2.9 minutes, travelers were paying up to $124.10 per hour. A previous study on one of the same corridors reached similar conclusions, calculating time savings at up to $116 per hour.

The study suggests several reasons for such high values of time. Users of HOT lanes may have higher-than-average incomes and thus higher-than-average values of time, for example. And travelers may overestimate time savings.

In addition, average time savings do not account for variation, so travelers may be paying “reliability insurance” against exceptionally long delays that may occur in the general travel lanes.

The second remarkable finding is that, rather than discouraging HOT lane use, increases in tolls actually encouraged more drivers to opt for those lanes. Perhaps HOT lanes are “Veblen goods”—think of luxury cars whose value derives in part from their high price. This would mean that HOT lane users were flaunting their status by using the lanes, which seems a stretch.

More likely, travelers perceive that the utility of HOT lanes increases with price. The study suggests this is the case. Yet the authors don’t quite connect the dots between this and the value- of-time finding. They suggest that price increases point to greater time savings, yet on average the time savings are quite modest. So, it might be that the signal travelers receive from higher tolls is that the likelihood of an exceptional delay has increased. The fact that reliability seems to be such a major factor in the value-of-time calculation would support this intuition.

These insights, even tentative ones, are particularly important now as the USDOT moves toward rule-makings on congestion and system preservation. Traditional measures of average or total delay do not match travelers’ revealed preferences very well—witness the mismatch between willingness to pay for a HOT lane and the assumed value of time in the Twin Cities. On the other hand, measuring and improving reliability would seem to be critically important to achieving outcomes important to travelers.

Eric Sundquist is Managing Director of SSTI.