Putting the target group’s perceived importance of service improvements in relation to their costs allowed us to prioritise investment decisions

How to calculate the marginal value-for-money ratio?

An example for real-time information

• The “Flexible Commuters” gave real-time information a 9.35% importance (total importance).
• It is assumed that 75% of this value is generated from displays at the bus stop and 25% from an app
• Stagecoach’s app currently does not provide real-time information. Friary bus station is the only stop along the three routes with real-time displays. Currently 28.5% of all journeys made on the routes 70/71/72 originate at this bus station. That means the current value of real-time info of this route is 9.35%*(25%*0+75%*28.5%) = 2.67% (current status).
• 20% of the originating journeys on the routes 70/71/72 come from the 2nd till 6th most frequented bus stops according to the electronic ticket machine data. Installing real-time displays at each of these stops on both sides would lead to an additional value of 9.35%*75%*20% = 1.87% (marginal value).
• The fix costs of installing these 10 real-time displays are £5,000 each plus £100 maintenance per year; i.e. £55,000 in total over 5 years (marginal money).
• The marginal value-for-money ratio for installing these 10 additional real-time displays is gauged at 1.87%/£55,000 = 0.000003560 (or 34.01 * 10^-8).
• Real-time info has the second-highest marginal value-for-money ratio for the routes 70/71/72, and should enjoy therefore priority when making investment decisions on upgrading these routes.

An illustrative example of the value-for-money chart for the Flexible Commuters for the routes 70/71/72

Upgrading bus routes to a high-quality bus corridor should be prioritised according to the Flexible Commuters’ value-for-money ratios of the different service attributes.

Improving reliability the most cost-effective way to increase patronage on the routes 70/71/72