Bikesharing Values Examined

Date

Sept. 7, 2017

News Type

Press Release

WASHINGTON—Bikesharing systems have become an increasingly common transportation option in urban areas around the world, for both visitors and residents alike. Internationally, there now are more than 600 bikesharing systems with roughly 600,000 bikes. Users in the largest US program, New York's CitiBike, logged over 10 million rides in 2015. Yet not much is known about the basic economic preferences of users, such as how they value time or saving on costs.

Today, a new paper examining those issues was posted by Resources for the Future (RFF)—Notching for Free: Do Cyclists Reveal the Value of Time? RFF Fellow Casey Wichman and Research Assistant Brandon Cunningham examine the response of bike-share users to a price “notch”, such as a hike in the rental fee after 30 minutes. The results of their study provide important insight about how much bike-share users trade off their time to save money by going out of the way to avoid a price increase.

Specifically, by exploiting a jump in the cost of a bicycle trip beyond 30 minutes in Denver's B-cycle program, the authors identify “bunching” behavior in which a cyclist avoids a price discontinuity by going out of his or her way to check in and check out a bicycle at an intermediate station along the route. Findings include:

  • Cyclists do not respond to a 400 percent increase in price, which suggests that value-of-time estimates predicated on highly attentive and price-sensitive consumers might be misguided—and therefore an issue for economic modeling.
  • Important differences exist across groups of users: morning commuters value their time the most, while evening recreational users value their time the least.
  • For similar markets with complicated nonlinear pricing (e.g., such as for water and electricity, where marginal prices increase with consumption), consumers may respond more strongly to information about quantity over price.

Said Dr. Wichman: “Our study shows that it is important to understand implicit trade-offs for valuing time spent commuting and for recreational endeavors. Our results provide strong evidence that bicyclists, like other consumers, respond to given pricing structures.”

Read the paper—Notching for Free: Do Cyclists Reveal the Value of Time?

Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.

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