This dissertation contributes novel results to the following areas of transportation research: travel time perception; valuation of travel time; and route choice modeling. This study presents a systematic identification of factors that lead to perception errors of travel time. In addition, the factors are related to similar factors on time perception research in psychology. These factors are included in econometric models to study their influence on travel time perception, and also identify which of these factors lead to overestimation or underestimation of travel times. These econometric models are estimated on data collected from commuters recruited from a previous research study in the Minneapolis-St. Paul region. The data (surveys, and Global Positioning System [GPS] points) consists of work trips (from home to work, and from work to home) of subjects. For these work trips, the subjects' self-reported travel times, and the subjects' travel times measured by GPS devices were collected. Furthermore, this dissertation provides the first empirical results that highlight the influence of perception errors in the valuation of travel time, and in the dynamic behavior of travelers' route choices. Last but not least important, this dissertation presents the most comprehensive literature review of the value of travel time reliability written to date.