Keith Vodden Dr. Douglas Smith - Transports Canada

Analysis and Estimation of the Social Cost of Motor Vehicle Collisions in Ontario
b) Lost time
The wage rate that we use to value time spent in traffic delays resulting from
motor vehicle collisions is derived from Statistics Canada data on average wage rates
(Statistics Canada-The Labour Market Cat. No.: 71-222-XWE). This value for 2004 is
just under $18 per hour. There is an extensive literature including Small (1992) and
Brownstone et al. (2002) that discusses what fraction of this wage should be used for
traffic delays. Small argues that based on his review of an extensive literature in this area
that the fraction should be 50%. The use of a fractional value reflects the fact that all
persons delayed are not necessarily employed and that many passengers will be children.
Brownstone et al. argue that revealed preference methods of determining willingness to
pay show that commuters place quite a high value on time, possibly higher than the
market wage. Substantial voluntary payment for reduced congestion on Ontario’s
Highway 407 provides a related example of this willingness to pay.
It seems clear that different types of individuals will place different values on time
spent in congested traffic. However, it appears highly unlikely that data would be
available to support a more detailed analysis of how willingness to pay to avoid delays
might vary across different types of drivers and passengers. As a result, our approach
draws on the mainstream literature. In this literature, the lower bound would be a value
of 50% of the 2004 market wage ($9). The upper bound from Transport Canada’s Urban
Congestion in Canada (2006-Table 1) gives a value of $32.25 per hour for Ontario in
2004. In our calculations below, we use $20.60 per hour, the average of these two values
as an average value for all road users. Note that no distinction is made between passenger
cars and large commercial vehicles with respect to value of time, and the reason behind it.
c) Additional fuel use
Incremental fuel costs result from delays (slower speeds), stopping (frequent with
lane closures) and detour distances. The COMPASS data provide the duration of lane
and road closures and the traffic volumes at the time of the incident. From this, we have
estimated idle times and detour/slower driving. The congestion cost model uses a stop
time of two hours (or the duration of closure whichever is smaller) and a slow
driving/detour time of one hour (or the duration of closure whichever is smaller).
From the U.S. Department of Transportation, we used an estimate of 2.25 litres of
gasoline for each hour spent idling. For detours and delays, we used an average fuel
efficiency amount of 11.25 litres per 100 km. Based on this fuel efficiency, each hour of
detour and delay, in addition to time stopped, consumes 5.5 litres of fuel. Fuel costs of
76.6 cents per litre (from Ontario Ministry of Energy historical price data) are used in the
model for 2004. Other values can be substituted in the model.
40 TNS Canadian Facts, Social and Policy Research