A framework for analyzing rank-ordered data with application to automobile demand

In this paper, we develop a general random utility framework for analyzing data on individuals’ rank-orderings. Specifically, we show that in the case with three alternatives one can express the probability of a particular rank-ordering as a simple function of first choice probabilities. This framework is applied to specify and estimate models of household demand for conventional gasoline cars and alternative fuel vehicles in Shanghai based on rank-ordered data obtained from a stated preference survey. Subsequently, the framework is extended to allow for random effects in the utility specification to allow for intrapersonal correlation in tastes across stated preference questions. The preferred model is then used to calculate demand probabilities and elasticities and the distribution of willingness-to-pay for alternative fuel vehicles.     

Generalized extreme value (GEV)-based error structures for multiple discrete-continuous choice models

This paper formally derives the class of multiple discrete-continuous generalized extreme value (MDCGEV) models, a general class of multiple discrete-continuous choice models based on generalized extreme value (GEV) error specifications. Specifically, the paper proves the existence of, and derives the general form of, closed-form consumption probability expressions for multiple discrete-continuous choice models with GEV-based error structures. In addition to deriving the general form, the paper derives a compact and readily usable form of consumption probability expressions that can be used to estimate multiple discrete-continuous choice models with general cross-nested error structures.The cross-nested version of the MDCGEV model is applied to analyze household annual expenditure patterns in various transportation-related expenses using data from a Consumer Expenditure Survey in the United States. Model estimation results and predictive log-likelihood based validation tests indicate the superiority of the cross-nested model over the mutually exclusively nested and non-nested model specifications. Further, the cross-nested model was amenable to the accommodation of socio-demographic heterogeneity in inter-alternative covariance across decision-makers through a parameterization of the allocation parameters.     

Modeling absolute and relative cost differences in stochastic user equilibrium problem

This paper aims to develop a hybrid closed-form route choice model and the corresponding stochastic user equilibrium (SUE) to alleviate the drawbacks of both Logit and Weibit models by simultaneously considering absolute cost difference and relative cost difference in travelers’ route choice decisions. The model development is based on an observation that the issues of absolute and relative cost differences are analogous to the negative exponential and power impedance functions of the trip distribution gravity model. Some theoretical properties of the hybrid model are also examined, such as the probability relationship among the three models, independence from irrelevant alternatives, and direct and indirect elasticities. To consider the congestion effect, we provide a unified modeling framework to formulate the Logit, Weibit and hybrid SUE models with the same entropy maximization objective but with different total cost constraint specifications representing the modelers’ knowledge of the system. With this, there are two ways to interpret the dual variable associated with the cost constraint: shadow price representing the marginal change in the entropy level to a marginal change in the total cost, and dispersion/shape parameter representing the travelers’ perceptions of travel costs. To further consider the route overlapping effect, a path-size factor is incorporated into the hybrid SUE model. Numerical examples are also provided to illustrate the capability of the hybrid model in handling both absolute and relative cost differences as well as the route overlapping problem in travelers’ route choice decisions.     

Random covariance heterogeneity in discrete choice models

In this paper, we extend the standard discrete choice modelling framework by allowing for random variations in the substitution patterns between alternatives across respondents, leading to increased model flexibility. The paper shows how such a Mixed Covariance model can be specified either with purely random variation or with a mixture of random and deterministic variation. Additionally, the model can be based on an underlying GEV or ECL structure. Finally, the model can be specified as a continuous mixture or as a discrete mixture. An application on Stated Preference data for the choice of departure time and travel mode shows that important gains in model performance can be obtained by allowing for random covariance heterogeneity. Furthermore, the approach leads to significant differences in the implied willingness to pay measures, and the substitution patterns between alternatives.     

Review and meta-analysis of U.K. time elasticities of travel demand

In contrast with reviews of values of time and price elasticities, the literature contains little by way of detailed reviews of travel time based choice and demand elasticities. This paper reports the most extensive meta-analysis of time-based demand elasticities yet undertaken, supplemented with a review of literature not previously in the public domain. The meta-analysis is based upon 427 direct elasticities covering travel time, generalised journey time (GJT) and service headway and drawn from 69 UK studies. The elasticities are found to vary, as expected, across attributes, and quite strong effects have been detected according to distance. We provide interesting insights into the relationship between long and short run elasticities and elasticities obtained from static models and choice models based on actual and hypothetical preferences. Significantly, the results seem to indicate that the duration for the long run demand impact to work through depends upon the periodicity of the model estimated. There is little variation apparent by journey purpose, source of the evidence, nor over time or by region/flow type, whilst travel time elasticities for high speed rail are not materially different from conventional contexts. The findings support some official elasticity recommendations and conventions but challenge others, and can be used to provide time-based elasticities where none exist or to assess new empirical evidence.     

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 class of RUM choice models that includes the model in which the utility has logistic distributed errors

A class of random utility maximization (RUM) models is introduced. For these RUM models the utility errors are the sum of two independent random variables, where one of them follows a Gumbel distribution. For this class of RUM models an integral representation of the choice probability generating function has been derived which is substantially different from the usual integral representation arising from the RUM theory. Four types of models belonging to the class are presented. Thanks to the new integral representation, a closed-form expression for the choice probability generating function for these four models may be easily obtained. The resulting choice probabilities are fairly manageable and this fact makes the proposed models an interesting alternative to the logit model. The proposed models have been applied to two samples of interurban trips in Japan and some of them yield a better fit than the logit model. Finally, the concavity of the log-likelihood of the proposed models with respect to the utility coefficients is also analyzed.     

A direct demand model for downtown work trips

This article documents the development of a direct travel demand model for bus and rail modes. In the model, the number of interzonal work trips is dependent on travel times and travel costs on each available mode, size and socioeconomic characteristics of the labor force, and the number of jobs. In estimating the models’ coefficients constraints are imposed to insure that the travel demand elasticities behave according to the economic theory of consumer behavior. The direct access time elasticities for both transit modes are estimated to be approximately minus two, and the direct linehaul time elasticities approximately minus one. The cross-elasticities with respect to the travel time components are estimated to be less than the corresponding direct elasticities. In general, the time cross-elasticities are such that rail trip characteristics but not car trip characteristics affect bus travel, and car trip characteristics but not bus trip characteristics affect rail travel. The cost elasticities lie between zero and one-half. Thus, the success of mass transit serving a strong downtown appears to depend on good access arrangements. This success can be confirmed with competitive linehaul speeds. The cost of travel appears to assume a minor role in choice of mode and tripmaking decisions. In the paper, a comparison is also made between the predictive performance of the models developed and that of a traditional transit model. The results indicate that the econometric models developed attain both lower percent error and lower variation of the error than the traditional model.     

Cost and time damping: evidence from aggregate rail direct demand models

There is a significant body of evidence from both disaggregate choice modelling literature and practical travel demand forecasting that the responsiveness to cost and possibly to time diminishes with journey length. This has, in Britain at least, been termed ‘Cost Damping’, and is recognised in guidance issued by the UK Department for Transport. However, the consistency of the effect across modes and data types has not been established. Cost damping, if it exists, affects both the forecasting of demand and our understanding of behaviour. This paper aims to investigate the evidence for cost and time damping in rail demand using aggregate rail ticket sales data. The rail ticket sales data in Britain has, for many years, formed the basis of analysis of a wide range of impacts of rail demand. It records the number of tickets sold between station pairs, and it is generally felt to provide a reasonably accurate reflection of travel demand. However, the consistency of these direct demand models with choice modelling and highway demand model structures has not been investigated. Rail direct demand models estimated by ticket sales data indicate only slight variation in the fare elasticity with distance, as is evidenced in the largest meta-analysis of price elasticities conducted to date (Wardman in J Transp Econ Policy 48(3):367–384, 2014). This study of UK elasticities shows strong variation between urban and inter-urban trips, presumably a segmentation at least in part by purpose, but less remaining variation by trip length. A lack of variation by length supports the hypothesis of cost damping, because constant cost sensitivity would imply that fare elasticity would increase strongly with distance, because of the increasing impact of higher fares at longer distances. In this paper we indicate that rail direct demand models have some consistency of behavioural paradigm with utility based choice models used in highway planning. We go on to use rail demand data to estimate time and fare elasticities in the context of various cost damping functions. Our empirical contribution is to estimate time elasticities on a basis directly comparable with cost elasticities and to show that the phenomenon of cost damping is strongly present in ticket sales data. This finding implies that cost damping should be included in models intended for multimodal analysis, which may otherwise give incorrect predictions.     

Importance of traveler attitudes in the choice of public transportation to work: findings from the Regional Transportation Authority Attitudinal Survey

The commute mode choice decision is one of the most fundamental aspects of daily travel. Although initial research in this area was limited to explaining mode choice behavior as a function of traveler socioeconomics, travel times, and costs, subsequent studies have included the effect of traveler attitudes and perceptions. This paper extends the existing body of literature by examining public transit choice in the Chicago area. Data from a recent Attitudinal Survey conducted by the Regional Transportation Authority (RTA) in Northeastern Illinois were used to pursue three major steps. First, a factor analysis methodology was used to condense scores on 23 statements related to daily travel into six factors. Second, the factor scores on these six dimensions were used in conjunction with traveler socioeconomics, travel times, and costs to estimate a binary logistic regression of public transit choice. Third, elasticities of transit choice to the six factors were computed, and the factors were ranked in decreasing order of these elasticities. The analysis provided two major findings. First, from a statistical standpoint, the attitudinal factors improved the intuitiveness and goodness-of-fit of the model. Second, from a policy standpoint, the analysis indicated the importance of word-of-mouth publicity in attracting new riders, as well as the need for a marketing message that emphasizes the lower stress level and better commute time productivity due to transit use.     

Transition choice probabilities and welfare analysis in random utility models with imperfect before–after correlation

Welfare in random utility models is used to be analysed on the basis of only the expectation of the compensating variation. De Palma and Kilani (De Palma, A., Kilani, K., 2011. Transition choice probabilities and welfare analysis in additive random utility models. Economic Theory 46(3), 427–454) have developed a framework for conditional welfare analysis which provides analytic expressions of transition choice probabilities and associated welfare measures. The contribution is of practical relevance in transportation because it allows to compute shares of shifters and non-shifters and attribute benefits to them in a rigorous way. In De Palma and Kilani (2011) the usual assumption of unchanged random terms before and after is made.The paper generalises the framework for conditional welfare analysis to cases of imperfect before–after association of the random terms. The joint before–after distribution of the random terms is introduced with postulated properties in terms of marginal distributions and covariance matrix. Analytic expressions, based on the probability density function and the cumulative distribution function of the joint before–after distribution, and simulation procedures for computation of the transition choice probabilities and the conditional expectations of the compensating variation are provided. Results are specialised for multinomial logit and probit. In the case without income effects, it is proved that the unconditional expectation of the compensating variation depends only on the marginal distributions.The theory is illustrated by a numerical example which refers to a multinomial logit applied to the choice of the transport mode with two specifications, one without and one with income effects. Results show that transition probabilities and conditional welfare measures are affected significantly by the assumption on the before–after correlation. The variability in the transition probabilities across transitions tends to decrease as the before–after correlation decreases. In the extreme case of independent random terms, the conditional expectations of the compensating variation tend to be close to the unconditional expectation.     

Estimating choice probabilities among nested alternatives

In several travel choice situations (e.g. automobile ownership level and trip frequency) the alternatives available to an individual randomly chosen from the population exhibit some internal choice-related ranking: the choice of a given alternative implies that all lower-ranked alternatives have been chosen. Such alternatives are referred to as “nested”. This paper presents a model for estimating choice probabilities among nested alternatives. The model is devised from the well known logit model and uses existing logit maximum-likelihood estimation techniques (and computer packages). The approach is shown to be more attractive than the multinomial logit and linear regression models, from a theoretical point of view, yet cheaper than the multinomial probit model. The model is developed in a disaggregate, utility maximization framework. An example application, estimating probabilities of trip frequencies by elderly individuals is presented.     

A review of the impact of parking policy measures on travel demand

This paper reviews the empirical evidence relating to the impact of parking policy measures on the demand for parking and for travel. Disaggregate modal choice models, disaggregate parking location models and site‐specific studies of parking behaviour are examined. With regard to modal choice models, it is concluded that few studies deal adequately with parking factors, but that there is some support for the view that parking policy measures are a relatively important influence on modal choice. When parking location models are examined parking policy variables are shown to have a substantial impact on choice of parking location. With regard to site‐specific studies, the paper concludes that there is a great variation in the parking price elasticities quoted, which reflects partly the methodological problems associated with such studies. Suggestions to improve model specification are made.     

Forecasting demand for high speed rail

It is sometimes argued that standard state-of-practice logit-based models cannot forecast the demand for substantially reduced travel times, for instance due to High Speed Rail (HSR). The present paper investigates this issue by reviewing the literature on travel time elasticities for long distance rail travel and comparing these with elasticities observed when new HSR lines have opened. This paper also validates the Swedish long distance model, Sampers, and its forecast demand for a proposed new HSR, using aggregate data revealing how the air–rail modal split varies with the difference in generalized travel time between rail and air. The Sampers long distance model is also compared to a newly developed model applying Box–Cox transformations. The paper contributes to the empirical literature on long distance travel, long distance elasticities and HSR passenger demand forecasts. Results indicate that the Sampers model is indeed able to predict the demand for HSR reasonably well. The new non-linear model has even better model fit and also slightly higher elasticities.     

Expanding the applicability of random regret minimization for route choice analysis

The discrete choice paradigm of random regret minimization (RRM) has been recently proposed in several choice contexts. In the route choice context, the paradigm has been used to model the choice among three routes and to formulate regret-based stochastic user equilibrium. However, in the same context the RRM literature has not confronted three major challenges: (i) accounting for similarities across alternative routes, (ii) analyzing choice set composition effects on choice probabilities, and (iii) comparing RRM-based models with advanced RUM-based models. This paper looks into RRM-based route choice models from these three perspectives by (i) proposing utility-based and regret-based correction terms to account for similarities across alternatives, (ii) analyzing the variation of choice set probabilities with the choice set composition, and (iii) comparing RRM-based route choice models with C-Logit, Path Size Logit and Paired Combinatorial Logit. The results illustrate the definition of the correction terms within the regret function, the effect of the choice set specificity of RRM-based route choice models, and the positive performance of these models when compared to advanced RUM-based models.     

Estimation of a constrained multinomial logit model

Identifying the set of available alternatives in a choice process after considering an individual’s bounds or thresholds is a complex process that, in practice, is commonly simplified by assuming exogenous rules in the choice set formation. The Constrained Multinomial Logit (CMNL) model incorporates thresholds in several attributes as a key endogenous process to define the alternatives choice/rejection mechanism. The model allows for the inclusion of multiple constraints and has a closed form. In this paper, we study the estimation of the CMNL model using the maximum likelihood function, develop a methodology to estimate the model overcoming identification problems by an endogenous partition of the sample, and test the model estimation with both synthetic and real data. The CMNL model appears to be suitable for general applications as it presents a significantly better fit than the MNL model under constrained behaviour and replicates the MNL estimates in the unconstrained case. Using mode choice real data, we found significant differences in the values of times and elasticities between compensatory MNL and semi-compensatory CMNL models, which increase as the thresholds on attributes become active.     

The accuracy of the multinomial logit model as an approximation to the multinomial probit model of travel demand

The multinomial probit model of travel demand is considerably more general but much less tractable than the better-known multinomial logit model. In an effort to determine the effects of using the relatively simple logit model in situations where the assumptions of probit modeling are satisfied but those of logit modeling are not, the accuracy of the multinomial logit model as an approximation to a variety of three-alternative probit models has been evaluated. Multinomial logit can give highly erroneous estimates of the choice probabilities of multinomial probit models. However, logit models appear to give asymptotically accurate estimates of the ratios of the coefficients of the systematic components of probit utility functions, even when the logit choice probabilities differ greatly from the probit ones. Large estimation data sets are not necessarily needed to enable likelihood ratio tests to distinguish three-alternative probit models from logit models that give seriously erroneous estimates of the probit choice probabilities. Inclusion of alternative-specific dummy variables in logit utility functions cannot be relied upon to reduce significantly the errors of logit approximations to the choice probabilities of probit models whose utility functions do not contain the dummies.     

A joint flexible econometric model system of household residential location and vehicle fleet composition/usage choices

Modeling the interaction between the built environment and travel behavior is of much interest to transportation planning professionals due to the desire to curb vehicular travel demand through modifications to built environment attributes. However, such models need to take into account self-selection effects in residential location choice, wherein households choose to reside in neighborhoods and built environments that are conducive to their lifestyle preferences and attitudes. This phenomenon, well-recognized in the literature, calls for the specification and estimation of joint models of multi-dimensional land use and travel choice processes. However, the estimation of such model systems that explicitly account for the presence of unobserved factors that jointly impact multiple choice dimensions is extremely complex and computationally intensive. This paper presents a joint GEV-based logit regression model of residential location choice, vehicle count by type choice, and vehicle usage (vehicle miles of travel) using a copula-based framework that facilitates the estimation of joint equations systems with error dependence structures within a simple and flexible closed-form analytic framework. The model system is estimated on a sample derived from the 2000 San Francisco Bay Area Household Travel Survey. Estimation results show that there is significant dependency among the choice dimensions and that self-selection effects cannot be ignored when modeling land use-travel behavior interactions.     

Identifying a behaviourally relevant choice set from stated choice data

Stated choice experiments are designed optimally in a statistical sense but not necessarily in a behavioural choice making sense. Statistical designs, and consequently model estimation, assume that the set of alternatives offered in the experiment are processed by respondents with a specific processing strategy. Much has been studied about attribute processing using discrete choice methods in travel choice studies, but this paper focuses more broadly on processing of alternatives in the choice set offered in the experiment. This paper is motivated by the primary idea that the distribution of predicted choice probabilities associated with a set of alternatives defining a given choice set might provide strong evidence on the strategies that agents appear to use when choosing a preferred alternative. In an empirical setting of a choice set of size three, four model specifications are considered including a model for the selection of the best alternative in the full choice set and three variants of a best–worst regime. Using state choice data on road pricing reform, the empirical analysis examines which model specification delivers the most accurate prediction of the chosen alternative. The results suggest which alternatives really matter in choice making and hence the alternatives that might be included in a choice set for model specification.     

A utility maximizing model of the demand for multi-destination non-work travel

The multinomial probit model of travel demand is considerably more general but much less tractable than the better-known multinomial logit model. In an effort to determine the effects of using the relatively simple logit model in situations where the assumptions of probit modeling are satisfied but those of logit modeling are not, the accuracy of the multinomial logit model as an approximation to a variety of three-alternative probit models has been evaluated. Multinomial logit can give highly erroneous estimates of the choice probabilities of multinomial probit models. However, logit models appear to give asymptotically accurate estimates of the ratios of the coefficients of the systematic components of probit utility functions, even when the logit choice probabilities differ greatly from the probit ones. Large estimation data sets are not necessarily needed to enable likelihood ratio tests to distinguish three-alternative probit models from logit models that give seriously erroneous estimates of the probit choice probabilities. Inclusion of alternative-specific dummy variables in logit utility functions cannot be relied upon to reduce significantly the errors of logit approximations to the choice probabilities of probit models whose utility functions do not contain the dummies.