THE MEASUREMENT OF USERS' WILLINGNESS TO PAY FOR IMPROVED RAIL FACILITIES

Rail operators are generally required to justify investment in passenger facilities on the basis of their potential impact on revenues. Given that the benefits to passengers of such facilities are usually small in comparison to more important service characteristics (e.g. journey time, fare), their impact is very difficult to determine from the analysis of real market data. In the last decade, stated preference techniques have presented themselves as a popular method for measuring the value of improved passenger facilities. Studies using these techniques have presented travellers with a range of hypothetical trade-off decisions between the cost of rail fares (and sometimes other journey characteristics) and a variety of improvements to passenger facilities. The monetary values that have been derived from these studies are generally considered to be implausibly high. Practitioners have more confidence in measures of the relative importance of the improvements examined rather than their implied absolute financial values. Recent work by Steer Davies Gleave has taken the view that these high monetary values reflect the use of ranking stated preference exercises and that more plausible values are likely to result from the use of choice stated preference exercises. In the latter case, respondents are reminded of the real-world constraints that influence their choices, in which fare increases are likely to impose a greater influence on their responses than in the more removed context of a ranking exercise. This paper provides information on the use of choice stated preference exercises to obtain more plausible monetary valuations of improvements to passenger facilities. Two recent studies will be reported, which examined rolling stock improvements on the Northern Line and facilities at the proposed new Kings Cross InterCity terminal. In each case, comparisons are made between the results of ranking and choice stated preference exercises. The implied monetary values of new facilities were found to be significantly lower in the choice exercise, to levels that have allowed them to be used with increased confidence by rail operators in their investment appraisal models. (A) For the covering abstract see IRRD 860299.