Employer Valuations of Employee Commuting Time

Abstract

A recently completed survey of office tenants in North Dallas, Texas, presented respondents with two hypothetical situations, each combining a temporary increase in commuting time with a temporary reduction in office rent. Respondents were asked whether the overall effect on their business would be positive, negative, or neutral. Although hypothetical, the questions were also topical. The respondents were all in the vicinity of a major highway project, the Dallas High Five Interchange, the construction of which has caused delays for some travelers. Econometric analysis of the survey responses provided estimates of the cost these office tenants attach to a temporary increase in the commuting time of their employees. This paper explains the derivation of these estimates and provides other findings relevant to their interpretation. The paper also motivates analysis by explaining how estimates of this sort can promote public awareness of the costs and benefits of highway projects.