News

Jakub Kastl (Princeton University and CERGE-EI ESC) and Filip Matějka (CERGE-EI) have published an article on personalized pricing and the value of time in Econometrica

6 June, 2025

Their study, titled “Personalized Pricing and the Value of Time: Evidence from Auctioned Cab Rides”, explores how much people value their time by analyzing data from a large ride-hailing European app.

The platform allows drivers to bid on trips, and consumers to choose between ride options with different prices and wait times. By studying these choices, the researchers estimate how wait times and prices affect demand, and how this varies across individuals.

They also examine what happens if the platform uses personalized pricing—charging different prices to different users. This approach slightly reduces consumer welfare (by about 2.5%) but increases total system-wide welfare by 5.2%, benefiting both the platform and the drivers.

One of their findings is that the average consumer values their time at $13.21 per hour. The study also shows large differences across users: riders in the top quartile (most sensitive to time) value their time about 3.5 times more than those in the bottom quartile, highlighting substantial variation in consumer preferences.

The study finds that if the platform sets prices based on drivers’ wait times (rather than using consumer data), it can still capture most of the gains from personalized pricing while also improving consumer welfare—a win-win outcome.

See the details here: Buchholz, Nicholas, Laura Doval, Jakub Kastl, Filip Matejka, and Tobias Salz. 2025. “Personalized Pricing and the Value of Time: Evidence from Auctioned Cab Rides.” Econometrica, 93(3): 929–958.
(Abstract) (Journal Homepage)