Monday, October 3, 2011

Estimating Value of Time from Choosing to Travel by Acela

I'm going to Washington, DC this week, so I had to book a ticket to get there. Flying costs about $250, but that doesn't include time and money costs of getting to the airports. Ultimately, flying is too expensive and takes too long so I take the train when I go to the capital once or twice a year. I usually take the Acela, too, but I think I am over-valuing my value of time. Select Northeast Regional trains will get me to DC in 3 hours and 12 minutes for a $78 base fare. The Acela will speed me there in 2 hours and 49 minutes for $222. (Fares are each way.) So I am paying $144 to save 23 minutes (this suggests I would pay $375 to save an hour), a slightly nicer seat and a frustrating wireless experience.

This assumes, of course, that the Acela is on time, which is not always the case. Last time I took the Acela it was 45 minutes late getting to my destination, more than wiping out any time savings, and I was not offered a refund for the extra expense. When I rode the TGV from Paris to Lyon this summer, the train was 45 minutes late and there were nice people waiting on the platform in Lyon with envelopes to use to send in your ticket for a refund. This happens a fair amount with the TGV and they are well equipped to handle it.  (Of course, the Japanese Shinkansen was tardy by a cumulative .6 seconds for 2010 so no one worries about refunds there.)

In any event, the Acela premium is steep, and it reflects high values of time (and the fact that someone else is picking up the tab).  My train better be prompt!
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