How does this work out if you believe you are significantly under-compensated at your current job (assuming it's the peak for the last five years)?
So if I save one hour a day because of Unspace's location, I'm going to add $100 times 250 working days a year to Y, or $25,000 a year on top of everything else (beverages, BBQs, whatever).
If that number is still significantly lower than the compensation you're after, be up front: "My comp has ranged from X to Y, but I think I'm worth Z to you because of a, b, and c."
Ultimately, every job interview boils down to explaining why Z is the right number and why it's in the employer's best interests to pay Z. If you can't explain that to an employer, you aren't going to get Z. I don't make these rules up, it's economics in the small.
In my case, I think what you can do is to let them know just how hardcore you are. If I tell my employer that I'll work on R&D and product development in my spare time at home, they can easily get a ballpark of additional hours worked and added value over Joe Schmoe. If I log an additional 10 hours a week from home after work hours, that could equate to an additional 25% hours over the standard 40. I understand alot of you may be putting in more than 40 hours, but that should also be part of your negotiation.
No, it accounts for time wasted, money spent on travel, stress due to traffic, etc. Basically, it's how much you'd be willing to pay to not have to commute. It has nothing to do with additional working hours.