The Value of Travel Time (VTT) is perhaps the most important number in Cost Benefit Analysis as the travel time savings are often the largest benefit. The VTT is often derived from discrete choice experiments (DCEs), where respondents trade off time, money, and other attributes. However, respondents who are reimbursed for their travel costs might approach these trade-offs differently since they usually don’t bear the full cost of travel. This raises the research question: To what extent does travel cost reimbursement (TCR) affect the value of travel time?

We investigate the impact of TCR on the VTT using datasets from the Netherlands (NL2022) and the United Kingdom (UK2014). We hypothesize that TCR might influence the VTT directly, lead to less consistent choices among respondents, and result in a higher willingness to accept (WTA) among those with TCR compared to those without. Using Multinomial Logit (MNL) and Mixed Logit (ML) models, we analyze the effect of TCR on the VTT, whilst allowing for heteroskedasticity. We also separate TCR interactions into WTA and willingness to pay (WTP) components, while accounting for socio-economic interactions to ensure robust findings across different experimental setups.

Our results show that commuter respondents in the NL2022 dataset with full TCR have a VTT approximately 29% to 45% higher than those without reimbursement. In the UK2014 dataset, the increase is even more pronounced, ranging from 58% to 143%. This effect is significant and consistent in experiments where only time and cost are considered. However, as more attributes are introduced, the difference in VTT becomes insignificant. We found no consistent patterns of scale heterogeneity in the VTT for respondents with and without TCR, leading us to reject the hypothesis that TCR recipients make less consistent choices. Moreover, while the interaction with VTT is more pronounced in the WTA domain than in the WTP domain, the model accounting for this does not outperform a model assuming equal TCR interaction in both domains.

In conclusion, VTT is significantly different for commuters depending on whether they receive travel cost reimbursement. However, these differences cannot be explained by scale heterogeneity or differences in WTA and WTP. We argue that national VTT values should consider travel cost reimbursement, particularly as these values are often based on 2-attribute time-cost experiments.