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How much do people value time? One way to look a this is to consider how much they need to be compensated to work. But this masks the disutility of effort, boredom, future payoffs, etc. And the value of time changes through the day (do not tell me lawyers reason all day in billable minutes). In other words, the value of time varies through time and from person to person. Hence it is important to get many estimates.
Hendrik Wolff finds a subtle way to estimate it. Looking at fluctuations in gasoline prices and the speeding behavior of car drivers, using speed data from an uncongested flat portions of highway in rural Washington State. The elasticity of -0.01 is very low, but from calculating the time gained through speeding, one can value time at about half gross wage. That is lower than previous estimates that were using congested highways, and frustration may have been priced in those. The Wolff estimates are cleaner, and they provide a logical negative relation between gas prices and speeds, a relation that was positive in studies tainted by congestion or other external factors.
Hendrik Wolff finds a subtle way to estimate it. Looking at fluctuations in gasoline prices and the speeding behavior of car drivers, using speed data from an uncongested flat portions of highway in rural Washington State. The elasticity of -0.01 is very low, but from calculating the time gained through speeding, one can value time at about half gross wage. That is lower than previous estimates that were using congested highways, and frustration may have been priced in those. The Wolff estimates are cleaner, and they provide a logical negative relation between gas prices and speeds, a relation that was positive in studies tainted by congestion or other external factors.
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