The Cost of Convenience: A Hedonic Approach to Travel Time Valuation and Cost‐Benefit Analysis
Recently published:
Mann, I. and Levinson, D. (2026) The Cost of Convenience: A Hedonic Approach to Travel Time Valuation and Cost‐Benefit Analysis. Journal of Regional Science [doi]
This paper presents a novel revealed-preference approach to estimating the value of travel time (VTT) and calculating consumer surplus for the economic evaluation of transport infrastructure. Departing from traditional stated-preference models, we derive time valuations by linking residential rental transactions in Greater Sydney to employment accessibility. We estimate a hedonic price function that controls for unobserved amenities and spatial sorting, recovering VTT estimates consistent with current cost-benefit analysis practice. Furthermore, we leverage the non-linearity of the price gradient, as well as cross-market variation in the price gradient, to perform a second-stage regression without instrumental variables, recovering the structural demand function for accessibility. This allows us to quantify welfare changes from non-marginal accessibility shocks, demonstrated on the Sydney Metro West project, grounding project appraisal in revealed spatial behavior.
