Working Time
Working time is subject to the forces of the labour market, and can thus be valued in a relatively straightforward manner. The value of working time is the opportunity cost of that time to the employer, which is generally equivalent to the wages of the worker.
For example, if a worker on a salary of £20 per hour travels to a meeting, the value of time in that case is £20 per hour, because that is the amount the employer would be willing to pay to reduce travel time (as travel time can be considered to be "wasted", i.e. not spent working).
In practice, time spent travelling on certain modes (especially train, but also bus and car passengers) can sometimes be used to carry out some work, while time spent using certain other modes (especially car drivers, cyclist and walkers) cannot be used to carry out work. This means the value of travel time (and thus the value of travel time reductions) for modes where the employee could carry on doing some work is lower for employees already using any such mode. Conversely the value of travel time reductions for such modes for employees currently using a mode that does not allow carry out work (and who would switch mode) is larger.
The UK Department for Transport calculates average values of time for travel on various modes of transport so that these values can be used to appraise transport projects as part of its New Approach to Appraisal . Some examples are given below in 2002 prices:
- Car drivers: £26.43 per hour
- Car passengers: £18.94 per hour
- Bus passengers: £20.22 per hour
- Rail passengers: £36.96 per hour*
- Underground passengers: £35.95 per hour*
- Walkers: £29.64 per hour
- Cyclists: £17.00 per hour
∗ Skewed by London wages
Read more about this topic: Value Of Time
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