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The Value of Public Transport

by Craig Foden

Jan 27, 2016

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Hi, I’m Craig Foden and I’m currently helping with some research and development of the Global Value Exchange as part of my work with the SROI Network. This is the first instalment in a mini series of blogs. In this blog post I want to share with you some findings from a small piece of research around the use of public transport.

The Value of Public Transport

What change are we looking for?
As you can see from the chain of events tree above, the outcome “Use of public transport (change in)” formed the central point of my research. Use of public transport is of particular interest as an outcome as it relates to many areas where there is significant potential for creation of social value.

What leads to a change in public transport use?
I identified three outcomes that contributed towards a change in use of public transport. These were: I found evidence that suggested these last two outcomes were particularly important to older people, as many were likely to stay at home or use private transportation to avoid having to stand on busy buses or trains and risk falling over.

How do we measure that change?
The indicator I used for the outcome of Use of public transport is the “Number of journeys made by public transport”. In the UK, the Department for Transport publishes information on number of passenger journeys made on public transport. Links to published reports relating to these numbers are available in the relevant information section of this indicator.

How do we value this change?
I felt that Average annual household saving due to use of public transport was one possible valuation for the outcome Use of public Transport (change in). It was interesting to note the large saving of $6251 per household per year found by one US study. Although use of public transport can be valued in isolation, wider impacts must be considered for a more comprehensive valuation of this outcome.

Does the change lead to any other changes?
The Global Value Exchange has a brilliant new feature which allows you to show a causal relationship between one change and another, creating a visualised chain of events. I found evidence that Use of public transport (change in) can lead to all of the following outcomes: The outcomes Air pollution (change in) and Traffic congestion levels (change in) in particular led me to some interesting valuations – with several of these using WTP (willingness to pay) valuation techniques.
It was found that WTP for a 50% reduction in airborne pollution ranged from £22.24 per household per month in the UK to a considerably lower £1.23 (equivalent) per household per month in China.
The large difference between these WTP values may be at least in part explained by purchasing power parity (PPP), as cost of goods in the UK is roughly 5 times greater than in China (if you're interested in PPP a useful tool to check out is http://salaryconverter.nigelb.me/). Differences between these values may also be due to the questions which were asked or average levels of understanding regarding the negative health and environmental impacts of air pollution.

Another useful valuation technique is to look at the avoided costs of air pollution control measures. I found valuations for 5 different air contaminants using this technique (PM10, sulphur dioxide, ozone, nitrogen dioxide and carbon monoxide). Avoided costs ranged from $901.80 per tonne per annum for ozone, to $8,121.21 per tonne per annum for nitrogen dioxide. This difference likely reflects the varying costs of control measures for different air pollutants.

Lastly, my research explored the valuations associated with traffic congestion levels. This led to some particularly thought-provoking findings.

A study conducted in Australia found that car share users were willing to pay the equivalent of $10.39 USD to avoid a 60 minute increase in journey time due to traffic congestion. A similar WTP valuation was found for motorists in the USA, with the same time saving being valued lower at $8 USD.  It’s worth noting how similar these values are despite the studies being conducted in different countries and measuring the WTP of slightly different groups (care share users as opposed to ordinary motorists).

Surprisingly, research conducted in Australia concluded that car share users valued the reliability of time saving almost as highly as the time saving itself. For more information check out the relevant information sections for these valuations:






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