The value of travel time savings is estimated frequently by discrete mode choice models where the partials with respect to time and cost are independent of income and of each other. Although a simple cost/time interaction term may be introduced to choice models to overcome the first case of independence, the resulting model remains independent of income. Theoretically founded methods for the inclusion of income term in discrete choice models have been developed under a goods and leisure tradeoff. Such models should also provide some founding for a cost/time tradeoff made at the mode choice level. Using a Cobb-Douglas utility function and assuming that income is exogenous, Jarra-Diaz and Ortuzar showed in 1989 that income may enter the set of explanatory variables in the form of an expenditure rate. This paper shows that a higher order Taylor expansion carries the expenditure rate specification as well as permitting a cost/time interaction term. An acceptance of model specification is indicative of values of travel time savings which take into account personal income, working hours and the length of trip (measured by time). (a).
Abstract