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.     

Park-and-ride lot choice model using random utility maximization and random regret minimization

This research aims to understand the park-and-ride (PNR) lot choice behaviour of users i.e., why PNR user choose one PNR lot versus another. Multinomial logit models are developed, the first based on the random utility maximization (RUM) concept where users are assumed to choose alternatives that have maximum utility, and the second based on the random regret minimization (RRM) concept where users are assumed to make decisions such that they minimize the regret in comparison to other foregone alternatives. A PNR trip is completed in two networks, the auto network and the transit network. The travel time of users for both the auto network and the transit network are used to create variables in the model. For the auto network, travel time is obtained using information from the strategic transport network using EMME/4 software, whereas travel time for the transit network is calculated using Google’s general transit feed specification data using a backward time-dependent shortest path algorithm. The involvement of two different networks in a PNR trip causes a trade-off relation within the PNR lot choice mechanism, and it is anticipated that an RRM model that captures this compromise effect may outperform typical RUM models. We use two forms of RRM models; the classical RRM and µRRM. Our results not only confirm a decade-old understanding that the RRM model may be an alternative concept to model transport choices, but also strengthen this understanding by exploring differences between two models in terms of model fit and out-of-sample predictive abilities. Further, our work is one of the few that estimates an RRM model on revealed preference data.

     

Allowing for heterogeneous decision rules in discrete choice models: an approach and four case studies

The study of respondent heterogeneity is one of the main areas of research in the field of choice modelling. The general emphasis is on variations across respondents in relative taste parameters while maintaining the assumption of homogeneous utility maximising decision rules. While recent work has allowed for differences in the utility specification across respondents in the context of looking at heterogeneous information processing strategies, the underlying assumption that all respondents employ the same choice paradigm remains. This is despite evidence in the literature that different paradigms work differently well on given datasets. In this article, we argue that such differences may in fact extend to respondents within a single dataset. We accommodate these differences in a latent class model, where individual classes make use of different underlying paradigms. We present four applications using three different datasets, showing mixtures between “standard” random utility maximisation models and lexicography based models, models with multiple reference points, elimination by aspects models and random regret minimisation models. In each of the case studies, the behavioural mixing model obtains significant gains in fit over the base structure where all respondents are hypothesised to use the same rule. The findings offer important further insights into the behavioural patterns of respondents. There is also evidence that what is retrieved as taste heterogeneity in standard models may in fact be heterogeneity in decision rules.     

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.     

Contrasts between utility maximisation and regret minimisation in the presence of opt out alternatives

An increasing number of studies of choice behaviour are looking at Random Regret Minimisation (RRM) as an alternative to the well established Random Utility Maximisation (RUM) framework. Empirical evidence tends to show small differences in performance between the two approaches, with the implied preference between the models being dataset specific. In the present paper, we discuss how in the context of choice tasks involving an opt out alternative, the differences are potentially more clear cut. Specifically, we hypothesise that when opt out alternatives are framed as a rejection of all the available alternatives, this is likely to have a detrimental impact on the performance of RRM, while the performance of RUM suffers more than RRM when the opt out is framed as a respondent being indifferent between the alternatives on offer. We provide empirical support for these hypotheses through two case studies, using the two different types of opt out alternatives. Our findings suggest that analysts need to carefully evaluate their choice of model structure in the presence of opt out alternatives, while any a priori preference for a given model structure should be taken into account in survey framing.     

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.     

Incorporating Driver Behaviors in Network Design Problems: Challenges and Opportunities

The goal of a network design problem (NDP) is to make optimal decisions to achieve a certain objective such as minimizing total travel time or maximizing tolls collected in the network. A critical component to NDP is how travelers make their route choices. Researchers in transportation have adopted human decision theories to describe more accurate route choice behaviors. In this paper, we review the NDP with various route choice models: the random utility model (RUM), random regret-minimization (RRM) model, bounded rationality (BR), cumulative prospect theory (CPT), the fuzzy logic model (FLM) and dynamic learning models. Moreover, we identify challenges in applying behavioral route choice models to NDP and opportunities for future research.     

Stated choices and benefit estimates in the context of traffic calming schemes: Utility maximization,regret minimization,or both?

This paper proposes a discrete mixture model which assigns individuals, up to a probability, to either a class of random utility (RU) maximizers or a class of random regret (RR) minimizers, on the basis of their sequence of observed choices. Our proposed model advances the state of the art of RU–RR mixture models by (i) adding and simultaneously estimating a membership model which predicts the probability of belonging to a RU or RR class; (ii) adding a layer of random taste heterogeneity within each behavioural class; and (iii) deriving a welfare measure associated with the RU–RR mixture model and consistent with referendum-voting, which is the adequate mechanism of provision for such local public goods. The context of our empirical application is a stated choice experiment concerning traffic calming schemes. We find that the random parameter RU–RR mixture model not only outperforms its fixed coefficient counterpart in terms of fit—as expected—but also in terms of plausibility of membership determinants of behavioural class. In line with psychological theories of regret, we find that, compared to respondents who are familiar with the choice context (i.e. the traffic calming scheme), unfamiliar respondents are more likely to be regret minimizers than utility maximizers.     

Active school travel: homogeneity or heterogeneity? That is the question

ABSTRACT

To explain and predict active school travel (AST), most studies have not investigated to what extent considering taste heterogeneity is an important influence on AST share. The main aim of the present study was to evaluate whether considering unobserved taste heterogeneity through mixed logit models – including random coefficient and random coefficient analysis (RCA) – materially improves/influences the AST prediction compared to a simpler model – the multinomial logit (MNL) model. The database comprises 735 valid observations. The results show that, with a 10% increase in perceived walking time to school, the MNL model predicts that the AST share would decrease by 7.8% (from 18.9% to 17.4%) while the RCA model predicts that it would decrease by 8.5% (from 18.9% to 17.3%). Thus, the expected share of AST is overestimated by MNL by one-tenth of a percentage point. Although there might be random taste variations around perceived distance to school, it seems the other important policy-sensitive variables, such as safety perception, homogeneously impacts on the AST share across households with different socioeconomic and built environment characteristics. Our empirical assessment suggests that considering taste heterogeneity does not necessarily improve the accuracy of analysis for the aggregate share of the AST concerning policy-sensitive variables.     

Transport Demand Management in Turkey: A Genetic Algorithm Approach

Abstract

This article proposes new models for estimating transport demand using a genetic algorithm (GA) approach. Based on population, gross national product and number of vehicles, four forms of the genetic algorithm transport planning (GATP) model are developed – one exponential and the others taking quadratic forms – and applied to Turkey. The best fit models in terms of minimum total average relative errors in the test period are selected for future estimation. Demand management strategies are proposed based on three scenarios: restricting private car use, restricting truck use and the simultaneous management of private car use and goods movement. Results show that the GATP model may be used to estimate transport demand in terms of passenger-kilometers traveled (pass-km), vehicle-kilometers traveled (veh-km) and ton-kilometers completed (ton-km). Results also show that the third scenario – simultaneous restrictions on private car use and goods movement – could reduce total veh-km by about 35% by 2025 in this study of Turkish rural roads.     

Generalized Extreme Value models for count data: Application to worker telecommuting frequency choices

Count models are used for analyzing outcomes that can only take non-negative integer values with or without any pre-specified large upper limit. However, count models are typically considered to be different from random utility models such as the multinomial logit (MNL) model. In this paper, Generalized Extreme Value (GEV) models that are consistent with the Random Utility Maximization (RUM) framework and that subsume standard count models including Poisson, Geometric, Negative Binomial, Binomial, and Logarithmic models as special cases were developed. The ability of the Maximum Likelihood (ML) inference approach to retrieve the parameters of the resulting GEV count models was examined using synthetic data. The simulation results indicate that the ML estimation technique performs quite well in terms of recovering the true parameters of the proposed GEV count models. Also, the models developed were used to analyze the monthly telecommuting frequency decisions of workers. Overall, the empirical results demonstrate superior data fit and better predictive performance of the GEV models compared to standard count models.     

An empirical comparison of travel choice models that capture preferences for compromise alternatives

Compromise alternatives have an intermediate performance on each or most attributes rather than having a poor performance on some attributes and a strong performance on others. The relative popularity of compromise alternatives among decision-makers has been convincingly established in a wide range of decision contexts, while being largely ignored in travel behavior research. We discuss three (travel) choice models that capture a potential preference for compromise alternatives. One approach, which is introduced in this paper, involves the construction of a so-called compromise variable which indicates to what extent (i.e., on how many attributes) a given alternative is a compromise alternative in its choice set. Another approach consists of the recently introduced random regret-model form, where the popularity of compromise alternatives emerges endogenously from the regret minimization-based decision rule. A third approach consists of the contextual concavity model, which is known for favoring compromise alternatives by means of a locally concave utility function. Estimation results on a stated route choice dataset show that, in terms of model fit and predictive ability, the contextual concavity and random regret models appear to perform better than the model that contains an added compromise variable.     

Incorporating institutional and spatial factors in the selection of the optimal locations of public electric vehicle charging facilities: A case study of Beijing,China

In this paper, we present a case study on planning the locations of public electric vehicle (EV) charging stations in Beijing, China. Our objectives are to incorporate the local constraints of supply and demand on public EV charging stations into facility location models and to compare the optimal locations from three different location models. On the supply side, we analyse the institutional and spatial constraints in public charging infrastructure construction to select the potential sites. On the demand side, interviews with stakeholders are conducted and the ranking-type Delphi method is used when estimating the EV demand with aggregate data from municipal statistical yearbooks and the national census. With the estimated EV demand, we compare three classic facility location models – the set covering model, the maximal covering location model, and the p-median model – and we aim to provide policy-makers with a comprehensive analysis to better understand the effectiveness of these traditional models for locating EV charging facilities. Our results show that the p-median solutions are more effective than the other two models in the sense that the charging stations are closer to the communities with higher EV demand, and, therefore, the majority of EV users have more convenient access to the charging facilities. From the experiments of comparing only the p-median and the maximal covering location models, our results suggest that (1) the p-median model outperforms the maximal covering location model in terms of satisfying the other’s objective, and (2) when the number of charging stations to be built is large, or when minor change is required, the solutions to both models are more stable as p increases.     

On accommodating spatial interactions in a Generalized Heterogeneous Data Model (GHDM) of mixed types of dependent variables

We develop an econometric framework for incorporating spatial dependence in integrated model systems of latent variables and multidimensional mixed data outcomes. The framework combines Bhat's Generalized Heterogeneous Data Model (GHDM) with a spatial (social) formulation to parsimoniously introduce spatial (social) dependencies through latent constructs. The applicability of the spatial GHDM framework is demonstrated through an empirical analysis of spatial dependencies in a multidimensional mixed data bundle comprising a variety of household choices – household commute distance, residential location (density) choice, vehicle ownership, parents’ commute mode choice, and children's school mode choice – along with other measurement variables for two latent constructs – parent's safety concerns about children walking/biking to school and active lifestyle propensity. The GHDM framework identifies an intricate web of causal relationships and endogeneity among the endogenous variables. Furthermore, the spatial (social) version of the GHDM model reveals a high level of spatial (social) dependency in the latent active lifestyle propensity of different households and moderate level of spatial dependency in parents’ safety concerns. Ignoring spatial (social) dependencies in the empirical model results in inferior data fit, potential bias and statistical insignificance of the parameters corresponding to nominal variables, and underestimation of policy impacts.     

Characterising group-cycling journeys using interactive graphics

The group-cycling behaviours of over 16,000 members of the London Cycle Hire Scheme (LCHS), a large public bikeshare system, are identified and analysed. Group journeys are defined as trips made by two or more cyclists together in space and time. Detailed insights into group-cycling behaviour are generated using specifically designed visualization software. We find that in many respects group-cycle journeys fit an expected pattern of discretionary activity: group journeys are more likely at weekends, late evenings and lunchtimes; they generally take place within more pleasant parts of the city; and between individuals apparently known to each other. A separate set of group activity is found, however, that coincides with commuting peaks and that appears to be imposed onto LCHS users by the scheme’s design. Studying the characteristics of individuals making group journeys, we identify a group of less experienced LCHS cyclists that appear to make more spatially extensive journeys than they would do normally while cycling with others; and that female cyclists are more likely to make late evening journeys when cycling in groups. For 20% of group cyclists, the first journey ever made through the LCHS was a group journey; this is particularly surprising since just 9% of all group cyclists’ journeys are group journeys. Moreover, we find that women are very significantly (p < 0.001) overrepresented amongst these ‘first time group cyclists’. Studying the bikeshare cyclists, or bike share ‘friends’, that individuals make ‘first time group journeys’ with, we find a significantly high incidence (p < 0.001) of group journeys being made with friends of the opposite gender, and for a very large proportion (55%) of members these first ever journeys are made with a friend that shares the same postcode. A substantial insight, then, is that group cycling appears to be a means through which early LCHS usage is initiated.     

Constrained nested logit model: formulation and estimation

A model of traveller behaviour should recognise the exogenous and endogenous factors that limit the choice set of users. These factors impose constraints on the decision maker, which constraints may be considered implicitly, as soft constraints imposing thresholds on the perception of changes in attribute values, or explicitly as hard constraints. The purpose of this paper is twofold: (1) To present a constrained nested logit-type choice model to cope with hard constraints. This model is derived from the entropy-maximizing framework. (2) To describe a general framework to deal with (dynamic) non-linear utilities. This approach is based on Reproducing Kernel Hilbert Spaces. The resulting model allows the dynamic aspect and the constraints on the choice process to be represented simultaneously. A novel estimation procedure is introduced in which the utilities are viewed as the parameters of the proposed model instead of attribute weights as in the classical linear models. A discussion on over-specification of the proposed model is presented. This model is applied to a synthetic test problem and to a railway service choice problem in which users choose a service depending on the timetable, ticket price, travel time and seat availability (which imposes capacity constraints). Results show (1) the relevance of incorporating constraints into the choice models, (2) that the constrained models appear to be a better fit than the counterpart unconstrained choice models; and (3) the viability of the approach, in a real case study of railway services on the Madrid–Seville corridor (Spain).     

Drivers’ parking location choice under uncertain parking availability and search times: A stated preference experiment

To assess parking pricing policies and parking information and reservation systems, it is essential to understand how drivers choose their parking location. A key aspect is how drivers’ behave towards uncertainties towards associated search times and finding a vacant parking spot. This study presents the results from a stated preference experiment on the choice behaviour of drivers, in light of these uncertainties. The attribute set was selected based on a literature review, and appended with the probabilities of finding a vacant parking spot upon arrival and after 8 min (and initially also after 4 min, but later dropped to reduce the survey complexity). Efficient Designs were used to create the survey design, where two rounds of pilot studies were conducted to estimate prior coefficients. Data was successfully collected from 397 respondents. Various random utility maximisation (RUM) choice models were estimated, including multinomial logit, nested logit, and mixed logit, as well as models accounting for panel effects. These model analyses show how drivers appear to accept spending time on searching for a vacant parking spot, where parking availability after 8 min ranks second most important factor in determining drivers’ parking decisions, whilst parking availability upon arrival ranks fourth. Furthermore, the inclusion of heterogeneity in preferences and inter-driver differences is found to increase the predictive power of the parking location choice model. The study concludes with an outlook of how these insights into drivers’ parking behaviour can be incorporated into traffic assignment models and used to support parking systems.     

What is the relationship between online activity and driving-licence-holding amongst young adults?

There is growing interest amongst both practitioners and researchers in the correlates of young adults’ driving-licence-acquisition. One aspect of the ongoing scholarly debate is whether taking part in online (i.e. virtual) activities may be associated with young adults feeling less need to drive and hence to acquire a driving licence. This paper addresses this issue by drawing on analysis of two distinct datasets. Both contain rich pseudo-diary instruments in which people indicate detailed characteristics of their unique online-activity profile. This includes both indicators of the types of online activities in which respondents participate, and a separate metric of internet-use intensity. The latter is defined in one dataset as the amount of time/week spent online, and in the other dataset the frequency of their internet use. On the basis of a set of multivariate regression analyses, a positive (i.e. complementary) cross-sectional relationship between young adults’ online activity and licence-holding was found. We find that young adults who use the internet are, net of confounding effects, more likely to hold a driving licence than otherwise identical young adults who do not use the internet. Both datasets show this type of effect, and it is robust across a range of model specifications, including multi-stage estimations to address cross-correlation between indicators of internet usage. In addition to the positive net statistical association, we also report several other noteworthy effects. Of the six effects associated with online-activity types that are directly comparable between the two datasets, we find that the correlation in the parameter estimates across the two datasets is 0.63. This suggests similar types of relationships across the two datasets. Also, in several (but not all) of our analyses we found an inverted ‘U’ shaped ceteris paribus relationship between intensity-of-internet-use and licence-holding. The positive net statistical association between internet use and licence-holding is a different relationship than previously reported in the literature, and therefore further research is needed to reconcile the differences (which are likely due at least in part to different methodological approaches and data resources). Further research is also needed to continue to resolve between the relative saliency of other hypothesised determinants of licence-holding (e.g. economic and socio-demographic explanators, as well as licence-acquisition regimes that vary by time and place).     

Using census aggregates to proxy for household characteristics: an application to vehicle ownership

Traditionally, researchers studying transportation choice have used data either acquired from household surveys or broad, region-wide aggregates. At the disaggregate level, researchers usually do not have access to important variables or observations. This study investigates the potential usefulness of a proxy approach to modeling discrete choice vehicle ownership: substituting narrow area-based aggregate proxies for missing micro-level explanatory variables by accessing large, publicly maintained datasets. We use data from the 2000 Bay Area Travel Survey (BATS) and the contemporaneous U.S. Census file to compare three models of vehicle ownership, drawing area-wide proxies from increasing levels of aggregation. The models with proxies are compared with a parallel model that uses only survey data. The results indicate that the proxy models are preferred in terms of model selection criteria, and predict vehicle ownership as well or better than the survey model. Parameter values produced by the proxy method effectively approximate those returned by household survey models in terms of coefficient sign and significance, particularly when the aggregate variables are representative of their household-level counterparts. The proxy model with the narrowest level of aggregation achieved the best fit, coefficient precision, and percentage of correct prediction.

Coherent approach for modeling and nowcasting hourly near-road Black Carbon concentrations in Seattle,Washington

With a growing awareness of the importance of near-road air pollution and an increasing population of near-road pedestrians, it is imperative to “nowcast” near-road air quality conditions to the general public. This necessitates the building hourly predictive models that are both accurate and easy to use. This study demonstrates an approach to model the hourly near-road Black Carbon (BC) concentrations given on-road traffic information and current meteorological conditions using datasets from two urban sites in Seattle, Washington. The optimal set of prediction variables is determined with a Bayesian Model Averaging (BMA) method and three different model structures are further developed and compared by goodness-of-fit. An innovative approach is proposed to translate wind direction from numerical values to categorical variables with statistical significance. By modeling the autocorrelation within the BC time series using an AR(1) component, the model achieves a satisfactory prediction accuracy. The conditional heteroscedasticity and heavy-tailed distribution of the model residuals are successfully identified and modeled by the General Auto Regressive Conditional Heteroscedasticity (GARCH) model, which provides valuable insights to the interpretation of prediction results. The methodological procedure demonstrated in selecting and fine-tuning the model is computationally efficient and valuable for further implementation onto online platforms for near-road BC nowcasting. A comparison between the two sites also reveals the effectiveness of local freight regulation for mitigating the environmental impacts from a heavy truck fleet.