• Study suggests the U.S. may undervalue timesaving transportation infrastructure

    For Lyft users, time is money—now, we know how much

    Study suggests the U.S. may undervalue timesaving transportation infrastructure

    How much money is time worth? University of Chicago economists and their collaborators think they have found the answer—$19.38 per hour. It’s a finding with policy implications, according to the economists, because it suggests the U.S. government may currently be underestimating the value of travel time.

    To quantify the value of time, the economists created a field experiment involving 3.7 million users of the Lyft app in 13 cities. By manipulating the price quotes and wait times displayed on the app, the researchers were able to study how much customers were willing to pay for a faster rideshare pickup.

    Released by the Becker Friedman Institute for Economics, the new working paper calculated the $19 figure by modeling the relationship between wait times and prices and extrapolating to find the value of an hour. The average wait time for a ride in the study was 3.08 minutes and the average price was $13.83.

    The broad nature of the experiment, said Prof. John List, allowed the economists to estimate the value of time across different people, choice circumstances and market conditions.

    A pioneer in the use of field experiments in economics, List co-authored the paper with UChicago alumni Ariel Goldschmidt, Ian Muir and Jenny Wang—who now work as data scientists at Lyft—and former UChicago postdoctoral researcher Robert Metcalfe, now at Boston University. V. Kerry Smith, an emeritus professor of economics at Arizona State University, also collaborated on the paper.

    “Our value of time estimate is larger than that which is currently used by the U.S. government, suggesting that society is undervaluing time improvements and subsequently underinvesting public resources in timesaving infrastructure projects and technologies,” said List, the Kenneth C. Griffin Distinguished Service Professor in Economics.

    On the basis of these findings, the study’s authors recommend that policymakers account for differences in the value of time based on location and time of day when estimating the costs and benefits of new public projects, and increase their rule-of-thumb value of time estimate to 75% of the mean wage rate.

    “Time is the ultimate scarce resource, and its value has deep implications for a range of economic phenomena and investment decisions,” the authors wrote. Among these, commute time is especially important because it impacts how people decide where to live.

    Read the full story at news.uchicago.edu


  • Remembering Yiran Fan

    The Kenneth C. Griffin Department of Economics and our campus community is deeply mourning the loss of Yiran Fan, who was an alumnus of the University’s Financial Math program and was enrolled in a joint program of the Booth School of Business and the Kenneth C. Griffin Department of Economics. He will be remembered as a generous classmate, a superb research and teaching assistant, a promising scholar, and a kind friend. 

    Many far-and-wide have expressed wishes and shared their plans to honor Yiran. Messages have been pouring into the department from Yiran’s friends, both within the University community and outside of it, as well as from faculty, students, and alumni. One such message is Lars Hansen’s testimony from his webpage

    Candlelight Vigil

    On Thursday, January 14, The University will hold a candlelight vigil for Yiran. The vigil will begin promptly at 4:00 p.m. in the center circle of the Main Quadrangle, and may be attended in person or remotely through a live broadcast. Those attending the vigil are expected to maintain COVID-19 safety requirements, including social distancing and masks. For additional details, including live-streaming information, please visit news.uchicago.edu

    Send a Note of Condolence

    Those who wish to may also offer a note of condolence for Yiran's family here. Notes will be translated, printed, and given to Yiran’s family.

    Memorial Fund

    In partnership with the Fan family, The University of Chicago is establishing a fund in memory of Yiran Fan to support students in the joint program of The Kenneth C. Griffin Department of Economics and Chicago Booth. To contribute, please visit give.uchicago.edu/ssdmemorial. The University will send a letter to the family to acknowledge your gift. 

    Make a Monetary Gift

    While the University is committed to assisting the family of Yiran Fan at this difficult time, we understand the desire of the community to support the bereaved family directly by gifts. Here are the community giving links:

    China residents (RMB donation)

    US residents (USD donation)

    Posthumous Proposal/Defense

    A posthumous proposal/defense will be held on March 2, 2021 in support of a PhD degree for Yiran Fan. Yiran's committee includes Lars Peter Hansen and Zhiguo He as co-chairs, along with professors Veronica Guerrieri at the University of Chicago Booth School of Business and Doron Ravid from The Kenneth C. Griffin Department of Economics. 

    Yiran's dissertation will consist of two essays, "Screening Competition under Flexible Information Acquisition" and "The Interaction of Bankers' Asset and Liability Management with Liquidity Concerns." Co-chairs will speak for approximately 25 minutes on each. 

    More details and plans to honor Yiran's memory will be shared as they are made available. 

  • Economics Major, Demetrius Johnson Jr., Receives Diversity Leadership Award

    Faculty, alumni, staff and student winners to be recognized during 2021 MLK commemoration

    Every year, the University of Chicago honors members of the UChicago community who demonstrate leadership and a sustained commitment to justice and equality. In addition to faculty, alumni and staff, this year’s Diversity Leadership Awards also recognize the contributions of UChicago students.

    This year’s recipients are Prof. Anita Blanchard, MD’90; Rami Nashashibi, AM’98, PhD’11; Jessica Jaggers of Chicago Booth; and UChicago students Nova Smith and Demetrius Johnson Jr. They will be honored Jan. 12 during a virtual celebration of UChicago’s annual Martin Luther King Jr. commemoration.

    The winners are selected by the Diversity Leadership Council, along with the University of Chicago Alumni Board.

    Portrait of Demetrius Johnson Jr. Demetrius Johnson Jr. is a third-year economics major in the College committed to improving the experience of Black undergraduate students on campus. He is president of the Theta Chapter of Alpha Phi Alpha fraternity, which he revived at the University.

    He is also a member of the University’s Chicago Maroon varsity football team and a two-time Midwest Conference All-Academic selection. After the social unrest that occurred in many parts of the country in 2020, Johnson founded the Black Letterwinning Athletes Coalition (BLAC) at UChicago, an organization designed to amplify and cater to the needs of Black student athletes at predominately white campuses­­­­­­­­­. Several other BLAC chapters have now launched at campuses across the country.

    An Odyssey Scholar, Johnson also tutors Chicago high school students on financial literacy through Moneythink Mentors, a program focused on the real-world financial decisions young people face. Johnson is part of the selective Financial Markets Program of the Trott Business Program; a member of UChicago Private Equity; and an analyst in BLK Capital Management, a 100% Black-owned, student-run, long/short equity hedge fund based at Harvard University. He will be an investment banking summer analyst at Morgan Stanley this summer.

    To view a complete list of award recipients, visit the full news story at news.uchicago.edu.

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