Open AccessAccessibility and uncertainty: An empirical analysis of option value in transport
Author(s) -
Anders Bondemark,
Erik Johansson,
Fredrik Kopsch
Publication year - 2021
Publication title -
journal of transport and land use
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.05
H-Index - 27
ISSN - 1938-7849
DOI - 10.5198/jtlu.2021.1783
Subject(s) - option value , argument (complex analysis) , transaction cost , value (mathematics) , preference , empirical research , database transaction , work (physics) , economics , product (mathematics) , mode choice , microeconomics , public transport , econometrics , computer science , transport engineering , engineering , mathematics , mechanical engineering , biochemistry , chemistry , statistics , geometry , machine learning , programming language , incentive
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.