The Economic Value of Time: Evidence from Africa

When excessive and inefficiently implemented, government interventions can result in significant economic losses for citizens. These include the often‐significant cost of lost time. This paper thus aims to estimate the potential economic welfare benefit of reducing public office waiting times. Based on data from Johannesburg, Lagos and Addis Ababa, we show that a one‐hour reduction in waiting time improves welfare by 66‐74% of the average local wage. High‐income earners, college graduates and private‐sector employees enjoy higher gains. Moreover, we note that the proxies currently used to quantify time‐saving benefits diverge significantly from the rate at which individuals substitute time for money. Our analysis also indicated a substantial delay‐induced citywide efficiency loss. Introducing public–private partnership and charging premium fees for faster service delivery are justifiable both on grounds of equity and efficiency.