Passengers’ willingness to pay for airport ground access time savings

There are cases when passengers are willing to pay a premium to reduce the travel time, in particular when the trip has to be made. This paper aims to provide insight into factors that determine passengers’ willingness to pay to reduce travel time for their ground access to an airport. A methodology is developed that comprises two steps: the identification of the passengers with zero willingness to pay and from the rest the estimation of the additional price they are willing to pay to reduce their travel time. For the first step a Probit model was formulated and for the second a linear regression model. To this purpose, data has been collected employing stated preference from passengers at the Athens International Airport. It has been found that a high percentage of passengers have zero willingness to pay, and of the remaining ones those using public transport have a significant willingness to pay to reduce access travel time. The methodology and the models are structured in such a way that their transferability to any airport environment is possible, thus providing a useful tool for decisions relating to airport ground access measures.     

Mind the map! The impact of transit maps on path choice in public transit

This paper investigates the impact of schematic transit maps on passengers’ travel decisions. It does two things: First, it proposes an analysis framework that defines four types of information delivered from a transit map: distortion, restoration, codification, and cognition. It then considers the potential impact of this information on three types of travel decisions: location, mode, and path choices.¹ Second, it conducts an empirical analysis to explore the impact of the famous London tube map on passengers’ path choice in the London Underground (LUL). Using data collected by LUL from 1998 to 2005, the paper develops a path choice model and compares the influence between the distorted tube map (map distance) and reality (travel time) on passengers’ path choice behavior. Results show that the elasticity of the map distance is twice that of the travel time, which suggests that passengers often trust the tube map more than their own travel experience on deciding the “best” travel path. This is true even for the most experienced passengers using the system. The codification of transfer connections on the tube map, either as a simple dot or as an extended link, could affect passengers’ transfer decisions. The implications to transit operation and planning, such as trip assignments, overcrowding mitigation, and the deployment of Advanced Transit Information System (ATIS), are also discussed.     

Evaluating web site service quality in public transport: Evidence from Taiwan High Speed Rail

More and more public transport system passengers plan their trips by using website services. The passengers’ perceived service quality of a website plays a crucial role in recognizing the satisfaction of a transportation service chain. This study aims to investigate the passengers’ perception of electronic service quality (e-SQ) delivery through the Taiwan High Speed Rail’s (THSR) website, by adopting the Rasch measurement model to measure a subjective latent construct: perceived e-SQ. The Rasch model can compare person parameters with item parameters, which are then subjected to a logarithmic transformation along a logit scale to clearly identify which e-SQ measurement items are appreciated by certain passengers. Analytical results show substantial differences between the perceived e-SQ of various personal characteristics such as age, income, and trip types. Empirical results also demonstrate that passengers are most satisfied with the website’s accuracy of information and introduction to the THSR stations’ surrounding area, but are not satisfied with instructions when a transaction fails as well as the carriage layout of the THSR. Our analytical results also identify which service items lead to the perceived e-SQ difference between business trip and leisure trip passengers. The relationship between the two main attribute dimensions – quality of transportation information provided and quality of website services – are also further examined. The empirical results can help a transportation system service operator to better understand how passengers perceive e-SQ and to suggest what should be improved.     

The impact of strategic management and fleet planning on airline efficiency - A random effects Tobit model based on DEA efficiency scores

As a result of the liberalisation of airline markets; the strong growth of low cost carriers; the high volatility in fuel prices; and the recent global financial crisis, the cost pressure that airlines face is very substantial. In order to survive in these very competitive environments, information on what factors impact on costs and efficiency of airlines is crucial in guiding strategic change. To evaluate key determinants of 58 passenger airlines’ efficiency, this paper applies a two-stage Data Envelopment Analysis (DEA) approach, with partially bootstrapped random effects Tobit regressions in the second stage. Our results suggest that the effects of route optimisation, in the sense of average stage length of the fleet, are limited to airline technical efficiency. We show that airline size and key fleet mix characteristics, such as aircraft size and number of different aircraft families in the fleet, are more relevant to successful cost management of airlines since they have significant impacts on all three types of airline efficiency: technical, allocative and, ultimately, cost efficiency. Our results also show that despite the fuel saving benefits of younger aircraft, the age of an airline’s fleet has no significant impact on its technical efficiency, but does have a positive impact on its allocative and cost efficiency.     

The university workers’ willingness to pay for commuting

Using a dynamic approach, employing data on job mobility, we demonstrate that university workers?? marginal willingness to pay for reducing commuting distance is about ?0.25 per kilometre travelled. This corresponds to a marginal willingness to pay for reducing commuting time of about 75?% of the net average hourly wage. For females, the willingness to pay is substantially higher than for males. It is also substantially higher for workers that work few hours per day, as predicted by theory.     

Do social norms regarding carbon offsetting affect individual preferences towards this policy? Results from a stated choice experiment

This study investigates the idea that people’s willingness to offset flight-related carbon emissions is a function of the collective participation rate, which can be regarded as a social norm, towards carbon offsetting. Additionally, we reveal people’s preferences toward two other environmental policies; a baggage allowance and airline eco-efficiency index. A discrete choice experiment is designed and administrated among a sample of air travelers. The results indicate that carbon offsetting generates utility, with people gaining more utility when the collective participation rate is high. Additionally, it was found that the baggage allowance and the eco-efficiency index strongly influenced respondents’ airline choices. People also became more sensitivity towards a baggage allowance and the eco-efficiency label, when the collective offsetting rate was high.     

Managing passenger behavioral intention: an integrated framework for service quality,satisfaction, perceived value,and switching barriers

This paper seeks to improve our understanding of passengers’ behavioral intention by proposing an integrated framework from the attitudinal perspective. According to the literature in marketing research, we establish a causal relationship model that considers “service quality-satisfaction-behavioral intentions” paradigm, perceived value theory, and switching barrier theory. Exploring passengers’ behavioral intention from satisfaction and perceived value help to understand how passengers are attracted by the company, while switching barriers assist in realizing how passengers are “locked” into a relationship with the current company. Furthermore, in order to capture the nature of service quality, we adopt a hierarchical factor structure which serves service quality as the higher-order factor. In this study, coach industry is selected as our research subject. The empirical results, as hypothesized, show that all causal relationships are statistically significant, and perceived value us the most important predictor of satisfaction and passengers’ behavioral intention. In conclusion, the managerial implications and suggestions for future research are discussed.     

Willingness to Pay for Airline Service Quality

Abstract

This paper looks at estimated valuations of some service‐quality attributes in an airline choice context using stated preferences methods. The analysis is based on information obtained in the most important route connecting the Canary Islands with the Iberian Peninsula: Gran Canaria–Madrid, and tries to contribute to the body of knowledge in this area, given the relatively few studies of the monetary valuations of air travel regarding level‐of‐service attributes. A feature of this analysis is the examination of variations in values according to different characteristics of the service, such as price, penalties for changes in the ticket, legroom, food, etc.; the currently experienced level of the attribute, and various socio‐economic factors that affect the characteristics of the trip and passengers. In addition, the important issue of added value regarding different attributes is addressed, obtaining the willingness‐to‐pay for different improvements of service quality. A further analysis is made about how taste heterogeneity (market segments) affects these values. Results from the stated preference experiment and the market value of some comparable service are also compared. Finally, the paper brings together evidence from other studies and compares them with the findings obtained herein.     

Intention and willingness to pay for green freight transportation: An empirical examination

The objective of this paper is to explore what motivates consumer intention and willingness to pay for green transportation. The model is based on the theory of planned behavior and explains the relationship between consumer attitude, perceived behavioral control and peer pressure on intention and willingness to pay for a t-shirt that was transported using energy efficient fuel. Data from a survey of U.S. consumers is analyzed. Results suggest consumer attitude and peer pressure are positively associated with intention which is positively associated with willingness to pay. High levels of consumer attitude, perceived behavioral control and intention suggest a positive outlook for organizations investing in green transportation initiatives. Results also suggest a need for organizations and government to market and educate consumers and citizens about the positive implications of green transportation and using energy efficient fuel.     

Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment

Choice behaviour might be determined by asymmetric preferences whether the consumers are faced with gains or losses. This paper investigates loss aversion and diminishing sensitivity, and analyzes their implications on willingness to pay and willingness to accept measures in a reference pivoted choice experiment in a freight transport framework. The results suggest a significant model fit improvement when preferences are treated as asymmetric, proving both loss aversion and diminishing sensitivity. The implications on willingness to pay and willingness to accept indicators are particular relevant showing a remarkable difference between symmetric and asymmetric model specifications. Not accounting for loss aversion and diminishing sensitivity, when present, produces misleading results and might affect significantly the policy decisions.     

Drivers’ willingness-to-pay to reduce travel time: evidence from the San Diego I-15 congestion pricing project

The adoption of congestion pricing depends fundamentally upon drivers’ willingness to pay to reduce travel time during the congested morning peak period. Using revealed preference data from a congestion pricing demonstration project in San Diego, we estimate that willingness to pay to reduce congested travel time is higher than previous stated preference results. Our estimate of median willingness to pay to reduce commute time is roughly $30 per hour, although this may be biased upward by drivers’ perception that the toll facility provides safer driving conditions. Drivers also use the posted toll as an indicator of abnormal congestion and increase their usage of the toll facility when tolls are higher than normal.     

An aggregate demand model for air passenger traffic in the hub-and-spoke network

In this paper, we build an aggregate demand model for air passenger traffic in a hub-and-spoke network. This model considers the roles of airline service variables such as service frequency, aircraft size, ticket price, flight distance, and number of spokes in the network. It also takes into account the influence of local passengers and social-economic and demographic conditions in the spoke and hub metropolitan areas. The hub airport capacity, which has a significant impact on service quality in the hub airport and in the whole hub-and-spoke network, is also taken into consideration.Our demand model reveals that airlines can attract more connecting passengers in a hub-and-spoke network by increasing service frequency than by increasing aircraft size in the same percentage. Our research confirms the importance of local service to connecting passengers, and finds that, interestingly, airlines’ services in the first flight leg are more important to attract passengers than those in the second flight segment. Based on data in this study, we also find that a 1% reduction of ticket price will bring about 0.9% more connecting passengers, and a 1% increase of airport acceptance rate can bring about 0.35% more connecting passengers in the network, with all else equal. These findings are helpful for airlines to understand the effects of changing their services, and also useful for us to quantify the benefits of hub airport expansion projects.At the end of this paper, we give an example as an application to demonstrate how the developed demand model could be used to valuate passengers’ direct benefit from airport capacity expansion.     

Introducing Willingness‐to‐pay for Noise Changes into Transport Appraisal: An Application of Benefit Transfer

Abstract

Numerous research studies have elicited willingness‐to‐pay values for transport‐related noise. However, in many industrialized countries including the UK, noise costs and benefits are still not incorporated into appraisals for most transport projects and policy changes. This paper describes the actions recently taken in the UK to address this issue, comprising: primary research based on the city of Birmingham; an international review of willingness‐to‐pay evidence; the development of values using benefit transfers over time and locations; and integration with appraisal methods. Amongst the main findings are: that the willingness‐to‐pay estimates derived for the UK are broadly comparable with those used in appraisal elsewhere in Europe; that there is a case for a lower threshold at 45 dB(A)Leq,18h rather than the more conventional 55 dB(A); and that values per dB(A) increase with the noise level above this threshold. There are significant issues over the valuation of rail versus road noise, the neglect of non‐residential noise and the valuation of high noise levels in different countries. Conclusions are drawn regarding the feasibility of noise valuation based on benefit transfers in the UK and elsewhere, and future research needs in this field are discussed.     

An analysis of destination choice for opaque airline products using multidimensional binary logit models

We investigate how customers respond to an opaque airline product offered by a European carrier. In this opaque product design, customers are randomly assigned to travel to one of approximately ten destinations; however, for a fee they may exclude one or more destinations from the choice set (or a particular package design) prior to learning which destination they will travel to. We use a multidimensional binary logit model to predict the probability that one or more alternatives will be chosen by a customer. Results show that customers are more likely to pay to exclude destinations located close to the origin airport and destinations that speak the same language as the origin airport. Length of stay, cost of living at the destination, and measures of destination attractiveness are also found to be significant predictors for some package designs. Based on these findings, we offer general recommendations for how to design opaque packages for airline customers.     

Electric vehicles and residential parking in an urban environment: Results from a stated preference experiment

This paper presents the results of a preference survey of 1545 respondents’ willingness to purchase electric vehicles (EVs) in Philadelphia. We pay particular attention to respondents’ willingness to pay for convenient charging systems and parking spaces. If the value of dedicated parking substantially outweighs the value of convenient charging systems, residential-based on-street charging systems are unlikely to ever be politically palatable. As expected, respondents are generally willing to pay for longer range, shorter charging times, lower operating costs, and shorter parking search times. For a typical respondent, a $100 per month parking charge decreases the odds of purchasing an EV by around 65%. Across mixed logit and latent class models, we find substantial variation in the willingness to pay for EV range, charge time, and ease of parking. Of note, we find two primary classes of respondents with substantially different EV preferences. The first class tends to live in multifamily housing units in central parts of the city and puts a high value on parking search time and the availability of on-street charging stations. The second class, whose members are likelier to be married, wealthy, conservative, and residing in single-family homes in more distant neighborhoods, are willing to pay more for EV range and charge time, but less for parking than the first group. They are also much likelier to consider purchasing EVs at all. We recommend that future research into EV adoption incorporate neighborhood-level features, like parking availability and average trip distances, which vary by neighborhood and almost certainly influence EV adoption.     

Neural based contingent valuation of road traffic noise

In this paper, we present a new approach to value the willingness to pay to reduce road noise annoyance using an artificial neural network ensemble. The model predicts, with precision and accuracy, a range for willingness to pay from subjective assessments of noise, a modelled noise exposure level, and both demographic and socio-economic conditions. The results were compared to an ordered probit econometric model in terms of the performance mean relative error and obtained 85.7% better accuracy. The results of this study show that the applied methodology allows the model to reach an adequate generalisation level, and can be applicable as a tool for determining the cost of transportation noise in order to obtain financial resources for action plans.     

On finite sample performance of confidence intervals methods for willingness to pay measures

This paper systematically compares finite sample performances of methods to build confidence intervals for willingness to pay measures in a choice modeling context. It contributes to the field by also considering methods developed in other research fields. Various scenarios are evaluated under an extensive Monte Carlo study. Results show that the commonly used Delta method, producing symmetric intervals around the point estimate, often fails to account for skewness in the estimated willingness to pay distribution. Both the Fieller method and the likelihood ratio test inversion method produce more realistic confidence intervals for small samples. Some bootstrap methods also perform reasonably well, in terms of effective coverage. Finally, empirical data are used to illustrate an application of the methods considered.     

Embedding risk attitude and decision weights in non-linear logit to accommodate time variability in the value of expected travel time savings

In recent years we have seen important extensions of logit models in behavioural research such as incorporation of preference and scale heterogeneity, attribute processing heuristics, and estimation of willingness to pay (WTP) in WTP space. With rare exception, however, a non-linear treatment of the parameter set to allow for behavioural reality, such as embedded risk attitude and perceptual conditioning of occurrence probabilities attached to specific attributes, is absent. This is especially relevant to the recent focus in travel behaviour research on identifying the willingness to pay for reduced travel time variability, which is the source of estimates of the value of trip reliability that has been shown to take on an increasingly important role in project appraisal. This paper incorporates, in a generalised non-linear (in parameters) logit model, alternative functional forms for perceptual conditioning (known as probability weighting) and risk attitude in the utility function to account for travel time variability, and then derives an empirical estimate of the willingness to pay for trip time variability-embedded travel time savings as an alternative to separate estimates of time savings and trip time reliability. We illustrate the richness of the approach using a stated choice data set for commuter choice between unlabelled attribute packages. Statistically significant risk attitude parameters and parameters underlying decision weights are estimated for multinomial logit and mixed multinomial logit models, along with values of expected travel time savings.     

Can value capture work in a car dependent city? Willingness to pay for transit access in Perth,Western Australia

This paper investigates the impact of transit on urban land markets in the highly car dependent corridors of Perth with a focus on where new fast rail transit services have recently been built. It determines people’s willingness to pay for transit access within different pedestrian catchments for each of the corridors based on hedonic price modelling using land value data on over 460,000 households. The case study uses cross sectional and panel data hedonic price modelling methodology for the calculation of willingness to pay for transit. It finds that land market increases of up to 40% can be achieved, and is particularly relevant to car dependent cities looking to capture the financial and economic value created to build transit extensions or entirely new systems, thus making a strong case for value capture funding of transit projects into car dependent suburbs and the potential for density increases near stations.     

Highway drivers' willingness to pay for speeding violations in Taiwan

This study investigates the effects of various factors on highway drivers' speeding behaviour and estimates the amount of money that a highway driver is willing to pay for speeding violations in Taiwan. The contingent valuation method is applied to measure drivers' preference and to derive the value function of the amount of money. Logit and probit models are estimated to analyse the significant variables influencing speeding behaviour and to calculate the willingness to pay for speeding violations. The research results show that increasing speeding fines is an effective way to reduce illegal driving behaviour on highways. Significant variables affecting highway drivers' speeding behaviour include gender, engine capacity, past offenders in the previous year, and the risk‐seeking characteristics of drivers. Finally, the logit and probit models show that the amounts of money that highway drivers are willing to pay for speeding violations are $US119 and $US116, respectively. Copyright © 2012 John Wiley & Sons, Ltd.