Accessibility and uncertainty: An empirical analysis of option value in transport

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Accessibility and uncertainty : An empirical analysis of option value in transport. / Bondemark, Anders; Johansson, Erik; Kopsch, Fredrik.

In: Journal of Transport and Land Use, Vol. 14, No. 1, 2021, p. 463-477.

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TY - JOUR

T1 - Accessibility and uncertainty

T2 - An empirical analysis of option value in transport

AU - Bondemark, Anders

AU - Johansson, Erik

AU - Kopsch, Fredrik

PY - 2021

Y1 - 2021

N2 - Are there option values for transport services? A few studies have tried to answer this question through various stated preference methods, but we do not know much about its magnitude in different contexts. In this paper, we summarize the theory on option value, present previous empirical work concerning transport, and discuss its links to accessibility. Accessibility can be seen as the end product of the transport system, and the argument we pursue is that option value is a component of accessibility. Therefore, estimations of the option value ought to be connected to the marginal accessibility change of an optional transport mode. The concept of substitutability has the potential to meet this criterion. It is the degree to which an alternative trip can replace an initially preferred trip, or, put differently, how accessibility at a location is composed. We conduct an empirical application to test whether the variation in housing transaction prices is associated with substitutability. We find that housing prices are higher where the accessibility is built up by several transport modes, given any level of total accessibility. We interpret this as households, on average, are willing to pay a risk premium to keep optional transport modes available.

AB - Are there option values for transport services? A few studies have tried to answer this question through various stated preference methods, but we do not know much about its magnitude in different contexts. In this paper, we summarize the theory on option value, present previous empirical work concerning transport, and discuss its links to accessibility. Accessibility can be seen as the end product of the transport system, and the argument we pursue is that option value is a component of accessibility. Therefore, estimations of the option value ought to be connected to the marginal accessibility change of an optional transport mode. The concept of substitutability has the potential to meet this criterion. It is the degree to which an alternative trip can replace an initially preferred trip, or, put differently, how accessibility at a location is composed. We conduct an empirical application to test whether the variation in housing transaction prices is associated with substitutability. We find that housing prices are higher where the accessibility is built up by several transport modes, given any level of total accessibility. We interpret this as households, on average, are willing to pay a risk premium to keep optional transport modes available.

U2 - 10.5198/JTLU.2021.1783

DO - 10.5198/JTLU.2021.1783

M3 - Article

AN - SCOPUS:85106936308

VL - 14

SP - 463

EP - 477

JO - Journal of Transport and Land Use

JF - Journal of Transport and Land Use

SN - 1938-7849

IS - 1

ER -