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Title: Real Option Analysis to Value Managed Lanes
Accession Number: 01623299
Record Type: Component
Abstract: The option value of managed lanes (MLs) refers to travelers’ willingness to pay for having MLs as a backup option for possible use in the future, even if they are not using the MLs for their current trip. This research used detailed travel data from Katy Freeway MLs and general purpose lanes (GPLs) to estimate the option value of MLs. Based on the data, this research recommends ML option users to be defined as only those travelers who used MLs at least once a year. As opposed to all travelers with transponders (even those who never used MLs). This research then used the Small-Rosen log sum method (1981) and the Black-Scholes option pricing method (1973) to estimate the option value of MLs. The log sum method frequently provided a poor estimate of the option value and thus the Black-Scholes method was recommended. The option value of the MLs was found to be similar to the value of travel time savings from the MLs for the ML option users. Thus, the option value of MLs is an important component of the total value of MLs and should be included in benefit estimation when planning MLs.
Supplemental Notes: This paper was sponsored by TRB committee AHB35 Standing Committee on Managed Lanes.
Monograph Title: Monograph Accession #: 01618707
Report/Paper Numbers: 17-00838
Language: English
Corporate Authors: Transportation Research Board 500 Fifth Street, NW Authors: Lee, SunghoonBurris, Mark WPagination: 30p
Publication Date: 2017
Conference:
Transportation Research Board 96th Annual Meeting
Location:
Washington DC, United States Media Type: Digital/other
Features: Figures; References; Tables
TRT Terms: Identifier Terms: Uncontrolled Terms: Subject Areas: Economics; Highways; Operations and Traffic Management
Source Data: Transportation Research Board Annual Meeting 2017 Paper #17-00838
Files: TRIS, TRB, ATRI
Created Date: Dec 8 2016 10:12AM
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