3. Travel Time

3.1 Value of travel time for vehicle occupants

3.1.1 Travel time values for light vehicle occupants

The value of travel time for the occupants of passenger cars was updated to 30 June 2013 using the change in Average Weekly Earnings (AWE) (Australian Bureau of Statistics, 2013b). The AWE for full‑time ordinary adult workers in Australia as per May 2013 ($1,420.90 per week) was updated to June 2013 using the CPI and was calculated at $1,423.67 per week or $37.46 per hour assuming a 38 hour week. As in previous Austroads unit values updates (Austroads, 2012a), private travel time was valued at 40% of seasonally adjusted full time AWE for Australia (Austroads, 1997) or $14.99 per person-hour (i.e. 40% of the AWE).

For business car travel, the value of travel time was assumed to be 129.8% of AWE (135% of full time AWE less 5.2% for payroll tax), assuming a 38 hour week. This methodology was in line with Austroads (1997)[1] and subsequent unit values updates (Austroads, 2012a). On this basis, business car travel was estimated at $48.63 per person-hour. These values are contained in Table 3.4.

3.1.2 Value of travel time for bus occupants

The value of travel time for bus drivers was estimated at that of a 5 axle articulated vehicle (mid- range of the heavy vehicle drivers) and for bus passengers as the value of travel time for private passenger car trips. These values are contained in Table 3.4. For future updates of ATAP parameter values, it is recommended that this is based on vehicle occupancy, available trip purpose and value of travel time for bus passengers.

3.1.3 Value of travel for commercial vehicle occupants

The value of travel time for the occupants (crew) of commercial vehicles (business hours) was updated to June 2013 using hourly wage rates based on the Road Transport and Distribution Award (2013, following the methodology recommended in Austroads (1997) and used in Austroads (2010)). The minimum wage per level of transport worker was then annualised and adjusted in terms of leave loading (17.5% of 4 weeks wages) and on-costs (payroll tax, long service leave, superannuation contribution at 9.25% and training levies). It was then adjusted in terms of assumed available work hours to arrive at a value of travel time per hour.

Road Transport and Distribution Workers Award

The weekly wage rates for each transport worker grade as published in the Road Transport and Distribution Award for the year 2013 (Australian Industrial Relations Commission, 2013), are shown in Table 3.1. These values formed the basis for the estimation of the value of travel time for commercial vehicle occupants in Table 3.4.

Table 9: Minimum weekly wage rates per transport worker grade
Transport worker grade Minimum weekly wage rate ($)
Grade 2 676
Grade 3 684
Grade 4 697
Grade 5 705
Grade 6 713
Grade 7 724
Grade 8 745
Grade 9 757
Grade 10 776

Source: Australian Industrial Relations Commission (2013)

Payroll tax

State payroll taxes in Table 3.2 were updated using state revenue offices and the Payroll Tax office (www.payrolltax.gov.au). A weighted average payroll tax rate for Australia was calculated using full time equivalent (FTE) employment per state from the Australian Bureau of Statistics (Australian Bureau of Statistics, 2013a). This weighted average payroll tax rate was then applied to the calculation of the value of travel time for commercial vehicle occupants presented in Table 3.4.

Table 10: Payroll tax rates per state as at June 2013
State Rate (%)
New South Wales 5.5
Queensland 4.8
Western Australia 5.5
Northern Territory 5.5
South Australia 5.0
ACT 6.9
Tasmania 6.1
Victoria 4.9
Average* 5.2

*average weighted in terms of employment. Source: State Revenue Offices and www.payrolltax.gov.au (viewed October 2013)

3.1.4 Vehicle occupancy

Vehicle occupancy was included in Table 3.4 as in previous updates. For comparison purposes, vehicle occupancy data was also obtained from the Austroads indicators, see table below. These data are for comparison purposes only and do not replace the vehicle occupancy data already in use and in Table 3.4.

Table 11: Car occupancy, Austroads 2011–12
State AM peak PM peak Off peak All day
NSW 1.21 1.25 1.32 1.26
Victoria 1.12 1.22 1.24 1.21
Queensland - 1.24 1.28 1.25
Western Australia - - - -
South Australia 1.0 1.25 1.28 1.26

Source: Austroads (National Performance Indicators 2013) http://algin.net/austroads/site/Index.asp?id=84

3.2 Value of travel time for freight

The value of travel time for freight was updated using the PPI for Road Freight and these values are included in Table 3.4. For future updates, these values could be based on a more recent and extensive study of the value of travel time for freight taking into account load and vehicle types. Austroads has identified the specific need for such a study in the near future and updates could draw on these results.

3.3 Estimated values of travel time for vehicle occupants and freight

The estimated values of travel time for vehicle occupants and freight are contained in Table 3.4.

Table 12: Estimated values of travel time (resource costs) – occupant and freight payload values, as at June 2013
  Non-urban Urban Freight travel time
  Occupancy rate Value per occupant Occupancy rate Value per occupant Non‑urban Urban
Vehicle type (persons/veh) ($/person-hour) (persons/veh) ($/person-hour) $ values per vehicle-hour
Cars (all types)
Private 1.7 14.99 1.6 14.99 na na
Business 1.3 48.63 1.4 48.63 na na
Utility vehicles
04. Courier Van-Utility 1.0 25.41 1.0 25.41 na na
05. 4WD Mid Size Petrol 1.5 25.41 1.5 25.41 na na
Rigid trucks
06. Light Rigid 1.3 25.41 1.3 25.41 0.78 1.53
07. Medium Rigid 1.2 25.72 1.3 25.72 2.11 4.15
08. Heavy Rigid 1.0 26.19 1.0 26.19 7.22 14.20
09. Heavy Bus (driver) 1.0 25.72 1.0 25.72 0.00 na
09. Heavy Bus (passenger) 20.0 14.99 20.0 14.99 0.00 na
Articulated trucks
10. Artic 4 Axle 1.0 26.81 1.0 26.81 15.53 30.59
11. Artic 5 Axle 1.0 26.81 1.0 26.81 19.80 39.01
12. Artic 6 Axle 1.0 26.81 1.0 26.81 21.36 42.06
Combination vehicles
13. Rigid + 5 Axle Dog 1.0 27.20 1.0 27.20 30.53 62.99
14. B-Double 1.0 27.20 1.0 27.20 31.46 64.91
15. Twin steer + 5 Axle Dog 1.0 27.20 1.0 27.20 29.50 60.89
16. A-Double 1.0 27.98 1.0 27.98 41.31 85.25
17. B Triple 1.0 27.98 1.0 27.98 42.17 87.01
18. A B Combination 1.0 27.98 1.0 27.98 50.79 104.80
19. A-Triple 1.0 28.45 1.0 28.45 60.89 125.64
20. Double B-Double 1.0 28.45 1.0 28.45 61.59 127.09

Note: na denotes not applicable. Source: ARRB Group Ltd.

3.4 Developments in travel time methodologies

"After decades of study, the value of travel time remains incompletely understood and ripe for further theoretical and empirical investigation" (Small, 2012).

This is indeed the case today with respect to the value of travel time savings, given its significance in economic evaluation. This issue, together with that of travel time reliability, remains an outstanding issue and a key focus area of research internationally, as well as in Australia.

The methodologies used to estimate travel time values were extensively reviewed in Austroads (2011a), which was then followed by studies that examined key aspects and how they are dealt with in project evaluation, namely travel time reliability (Austroads, 2011b) and small travel time savings (Austroads, 2011c). Issues and developments in travel time reliability are also expanded upon in the following section. The conclusion of the Austroads research into the treatment of small travel time savings (Austroads, 2011c) was that there was uncertainty regarding what constitutes ‘small’ travel time savings and mixed evidence for the use of different values of travel time savings. Estimation difficulties were also identified. Given these factors, the research concluded that there were limited grounds for valuing small travel time savings differently.

More recently, work undertaken internationally (see Wardman et al., 2013) into travel time savings has focused on the issue of trip purpose and the review of the wage rate in estimating values for work trips, as well as for commuting trips (e.g. by public transport). No firm guidance emerged from the review due to the variation in methods identified internationally, although the continued dominance of the wage rate (plus non-wage labour costs, i.e. the cost saving approach) was identified as the basis of work trip travel time values due to its simplicity. There was also a need for values for travel time savings to be updated and to reflect modern (electronic age) work practices and travel patterns, which involve commuters being able to work while using public transport (building on the Hensher approach of 1977). The potential for the use of willingness to pay (WTP) techniques to estimate the value of travel time savings was examined in terms of revealed preference (RP) and stated preference (SP) techniques with some comparison of these methods. An aspect identified in the research was also that of employer valuation versus employee WTP for travel time savings. Developments in this area in Australia must be monitored and adapted for future updates of ATAP parameter values.

3.5 Status of research on travel time reliability

Travel time reliability and its role in project evaluation were addressed in detail in Austroads (2011b). The primary objective of the project was the review of methods and measures of travel time reliability. The project also documented the proceedings and outcomes of an international workshop on travel time and project evaluation held in 2009 in Vancouver, Canada, under the auspices of the State Highway Research Program (SHRP2) and the Joint Transport Research Committee (JTRC). The principal outcome of the workshop was that there has been limited progress in incorporating travel time reliability in project evaluation internationally.

A review of more recent work in this area since the workshop (see Transportation Research Board, 2013) and reviews undertaken in the UK (Small, 2012) reveals that research on travel time reliability has been focused more on issues of variability of travel time and unpredicted variation in trip times arising from incidents as opposed to expected delays (non-recurrent versus recurrent congestion). Evidence also points to the potential of willingness to pay (stated preference) techniques as a means of valuing travel time and value of variability (Small, 2012). However, the consensus remains that travel time variability has potential, but has not yet been implemented in economic evaluation. The standard approach is still centred around the mean and standard deviation (e.g. New Zealand's approach[2]) but also the 95th percentile, which has implications for the values attached to travel time. However, research needs to be based on detailed analysis of network based trip data in terms of origin-destination of trips and trip lengths and delays experienced. In the United States, the State Highways Research Program (SHRP2) component C11 has recently compiled a methodology and spreadsheet tools for ‘sketch type’ estimation of travel time reliability as part of a suite of resources for the estimation of wider economic benefits in economic evaluation (Transportation Research Board, 2013). Internationally, travel time reliability ratios (i.e. travel time reliability as a percentage of travel time values) have also been used in some countries.

Further research in this area has been identified by Austroads as a priority in the future and it is recommended that the results of this work be incorporated into future updates of ATAP parameter values as they become available.

[1] The payroll tax assumed in Austroads (1997) and used in previous Austroads (2012a) estimates of business car travel time was 7%, but this has subsequently been estimated as 5.2% as presented in Table 3.2.

[2] Approaches to estimating travel time reliability for inclusion in economic evaluation are also set out in detail in the New Zealand Transport Agency’s Economic Evaluation Manual (NZTA, 2013).