Experience as a conditioning effect on choice: Does it matter whether it is exogenous or endogenous?

Previous choice studies have proposed a way to condition the utility of each alternative in a choice set on experience with the alternatives accumulated over previous periods, defined either as a mode used or not in a most recent trip, or the mode chosen in their most recent trip and the number of similar one-way trips made during the last week. The paper found that the overall statistical performance of the mixed logit model improved significantly, suggesting that this conditioning idea has merit. Experience was treated as an exogenous influence linked to the scale of the random component, and to that extent it captures some amount of the heterogeneity in unobserved effects, purging them of potential endogeneity. The current paper continues to investigate the matter of endogeneity versus exogeneity. The proposed approach implements the control function method through the experience conditioning feature in a choice model. We develop two choice models, both using stated preference data. The paper extends the received contribution in that we allow for the endogenous variable to have an impact on the attributes through a two stage method, called the Multiple Indicator Solution, originally implemented in a different context and for a single (quality) attribute, in which stage two is the popular control function method. In the first stage, the entire utility expression associated with all observed attributes is conditioned on the prior experience with an alternative. Hence, we are capturing possible correlates associated with each and every attribute and not just one selected attribute. We find evidence of potential endogeneity. The purging exercise however, results in both statistical similarities and differences in time and cost choice elasticities and mean estimates of the value of travel time savings. We are able to identify a very practical method to correct for possible endogeneity under experience conditioning that will encourage researchers and practitioners to use such an approach in more advanced non-linear discrete choice models as a matter of routine.

     

Inferring attribute non-attendance from stated choice data: implications for willingness to pay estimates and a warning for stated choice experiment design

There is a growing interest in traveller behaviour research to explore alternative information processing strategies (often referred to as heuristics or rules) adopted by individuals when assessing packages of attributes describing alternatives in a choice set, and making a choice. One popular attribute processing rule relates to attributes not being considered (i.e., being ignored), for all manner of reasons, referred to in the small but growing literature as attribute non-attendance or non-preservation. Researchers have used a mixture of methods to study the role of attribute non-attendance, including supplementary questions on whether each attribute is ignored or not, and methods in which the functional form of the utility expressions defining an alternative can recognise the possibility, up to a probability, of an attribute being ignored. Although supplementary questions are worthy of further consideration, despite the controversy as to the reliability of the response, recent interest has focused on ways to establish the incidence of attribute non-attendance without recourse to such evidence. In this paper we use an existing data set of choice amongst four attributes describing alternative car non-commuting trips, to illustrate the proposed method, and to compare values of travel time savings under each possible combination of non-attendance attributes relative to a model in which all attributes are assumed to be fully attended to. The paper reveals a major concern with the way that attribute levels and ranges are selected in the design of choice experiments, which can induce non-attendance situations where willingness to pay estimates cannot be obtained.     

Feebates, footprints and highway safety

This paper presents an analysis of a market-based policy aimed at encouraging manufacturers to develop more fuel efficient vehicles without affecting the car buyer’s choice of vehicle size. A vehicle’s size is measured by its “footprint”, the product of track width and wheelbase. Traditional market-based policies to promote higher fuel economy, such as higher gasoline taxes or gas guzzler taxes, also induce motorists to purchase smaller vehicles. Whether or not such policies affect overall road safety remains controversial, however. Feebates, a continuous schedule of new vehicle taxes and rebates as a function of vehicle fuel consumption, can also be made a function of vehicle size, thus removing the incentive to buy a smaller vehicle. A feebate system based on a vehicle’s footprint creates the same incentive to adopt technology to improve fuel economy as simple feebate systems while removing any incentive for manufacturers or consumers to downsize vehicles.     

A derived demand model of regional highway diesel fuel use

A regional, econometric model of heavy truck diesel fuel use is derived based on the theory of production. Input demand functions for new trucks and diesel fuel are specified and estimated. A simple, logistic scrappage model is estimated and used to estimate total heavy truck stocks and diesel-engine heavy truck stocks. Demand equations based on the AIDS almost ideal demand system flexible form cost function are estimated for new heavy truck demand and regional highway diesel fuel demand. New heavy truck demand is found to be elastic with respect to GNP, inelastic with respect to own price, and appears extremely sensitive to short term GNP trends. The short run price elasticity of diesel fuel demand is found to be very small.     

Does scale heterogeneity across individuals matter? An empirical assessment of alternative logit models

There is growing interest in establishing a mechanism to account for scale heterogeneity across individuals (essentially the variance of a variance term or the standard deviation of utility over different choice situations), in addition to the more commonly identified taste heterogeneity in mixed logit models. A number of authors have recently proposed a model that recognizes the relationship between scale and taste heterogeneity, and investigated the behavioural implications of accounting for scale heterogeneity in contrast to a term in the utility function, itself. In this paper we present a general model that extends the mixed logit model to explicitly account for scale heterogeneity in the presence of preference heterogeneity, and compare it with models that assume only scale heterogeneity (referred to as the scale heterogeneous multinomial logit model) and only preference heterogeneity. Our empirical assessment suggests that accommodating scale heterogeneity in the absence of accounting for preference heterogeneity may be of limited empirical interest, resulting in a statistically inferior model, despite it being an improvement over the standard MNL model. Scale heterogeneity in the presence of preference heterogeneity does garner favour, with the generalized mixed logit model an improvement over the standard mixed logit model. The evidence herein suggests, however, that compared to a failure to account for preference heterogeneity that is consequential, failure to account for scale heterogeneity may not be of such great empirical consequence in respect of behavioural outputs such as direct elasticities and willingness to pay. However additional studies are required to establish the extent to which this evidence is transferable to a body of studies.     

an analysis of transportation energy conservation projects in developing countries

Industrialized countries have extensive experience with various transportation energy conservation measures and have been making steady progress in improving the efficiency of their transport sector. Less Developed Countries (LDCs) have also been making progress, but their experience in many aspects of transportation energy conservation is very limited. Development organizations have funded many transportation projects in developing countries, but the vast majority of these projects were designed to improve the transportation infrastructure. Very few transportation energy conservation projects have been implemented and decision-makers face a scarcity of information on effective strategies. This paper gives an overview of transportation projects in LDCs in order to identify those transportation energy conservation measures that offer the greatest potential for LDCs. Two case studies, from Tunisia and Costa Rica, are given to illustrate the issues involved in implementing transportation energy conservation measures in LDCs. Conclusions are drawn to suggest actions for developing countries and for development organizations.Acronyms DECAT Driver Energy Conservation Awareness Training - DSE Direccion Sectorial de Energia (Costa Rica) - GDP Gross domestic product - km Kilometer - LDCs Less Developed Countries - TOE Metric tonne of oil equivalent - USAID US Agency for International Development     

Estimating daily vehicle usage distributions and the implications for limited-range vehicles

Understanding the potential market for limited-range vehicles is important to planning research and development programs for electric and hybrid vehicles and for gaseous-fueled vehicles as well. Studies of consumer preferences and perceptions have shown vehicle range to be a very important vehicle attribute. Studies of household vehicle use, on the other hand, have suggested that the range requirements most households place on vehicles are quite modest. The latter, however, have been severely limited by the absence of longitudinal data on the usage of individual vehicles. Instead, they have relied on single-day surveys on many vehicles, an inappropriate data source. This study develops a method for estimating daily travel distributions for individual vehicles and applies it to a recent longitudinal survey of miles and days between refuelings for over 2000 vehicles. Every vehicle in the sample has at least 30 consecutive refueling intervals. A variety of measures of “range requirement” are defined and calculated. The results confirm the existence of a substantial potential market (20–50% of all household vehicles) for vehicles with ranges on the order of 100 miles. Future research using these data and this method could describe the nature of vehicles with limited-range needs and the households which own them.     

Random regret minimization or random utility maximization: an exploratory analysis in the context of automobile fuel choice

Interest in alternative behavioural paradigms to random utility maximization (RUM) has existed ever since the dominance of the RUM formulation. One alternative is known as random regret minimization (RRM), which suggests that when choosing between alternatives, decision makers aim to minimize anticipated regret. Although the idea of regret is not new, its incorporation into the same discrete choice framework of RUM is very recent. This paper is the first to apply the RRM‐model framework to model choice amongst durable goods. Specifically, we estimate and compare the RRM and RUM models in a stated choice context of choosing amongst vehicles fuelled with petrol, diesel and hybrid (associated with specific levels of fuel efficiency and engine capacity). The RRM model is found to achieve a marginally better fit (using a non‐nested test of differences) than its equally parsimonious RUM counterpart. As a second contribution, we derive a formulation for regret‐based elasticities and compare utility‐based and regret‐based elasticities in the context of stated vehicle type choices. We find that in the context of our choice data, mean estimates of elasticities are different for many of the attributes and alternatives. Copyright © 2011 John Wiley & Sons, Ltd.     

A note on implicit consumer discounting of automobile fuel economy: Reviewing the available evidence

A key element in the long run response of the automotive market to higher fuel prices is consumers' willingness to pay for fuel economy improvements. Eight recent studies are examined and estimates of asset price/operating cost discount rates are derived for each. A critical comparison of results suggests that most are implausible. Plausible estimates range from 4 to 40% as a function of household income.