Parameter transfer of common-metric attributes in choice analysis: implications for willingness to pay

There is a growing literature that promotes the presence of a mix of compensatory and semi-compensatory processing strategies in the way that individuals evaluate packages of attributes in real or hypothetical markets, and make choices. This paper proposes a specification for the utility form in a choice model to test if, given a pair of attributes with a common-metric (e.g., components of travel time or cost), the attribute with the dominating level defines the marginal (dis)utility that is assigned to both attributes. We refer to this processing strategy as a parameter transfer rule. We use a stated choice data set, in the context of car driving individuals choosing between tolled and non-tolled routes, to estimate a mixed logit model which incorporates the presence of the parameter transfer rule and the conventional fully compensatory rule, both existing up to a probability. We find that if this parameter transfer heuristic is part of the mix, the WTP is more than 30% higher, on average, than when only a fully compensatory rule is imposed. We also contrast the parameter transfer rule with other semi-compensatory heuristics which have been investigated in other papers, and show that the finding adds further support to the accumulating evidence that a semi-compensatory attribute processing rules tend to result in higher mean WTP estimates compared to the fully compensatory attribute processing rule.     

The implications on willingness to pay of respondents ignoring specific attributes

Individuals processing the information in a stated choice experiment are typically assumed to evaluate each and every attribute offered within and between alternatives, and to choose their most preferred alternative. However, it has always been thought that some attributes are ignored in this process for many reasons, including a coping strategy to handle ones perception of the complexity of the choice task. Nonetheless, analysts typically proceed to estimate discrete choice models as if all attributes have influenced the outcome to some degree. The cognitive processes used to evaluate trade-offs are complex with boundaries often placed on the task to assist the respondent. These boundaries can include prioritising attributes and ignoring specific attributes. In this paper we investigate the implications of bounding the information processing task by attribute elimination through ignoring one or more attributes. Using a sample of car commuters in Sydney we estimate mixed logit models that assume all attributes are candidate contributors, and models that assume certain attributes are ignored, the latter based on supplementary information provided by respondents. We compare the value of travel time savings under the alternative attribute processing regimes. Assuming that all attributes are not ignored and duly processed, leads to estimates of parameters which produce significantly different willingness to pay (WTP) to that obtained when the exclusion rule is invoked.     

Assuring finite moments for willingness to pay in random coefficient models

Random coefficient models such as mixed logit are increasingly being used to allow for random heterogeneity in willingness to pay (WTP) measures. In the most commonly used specifications, the distribution of WTP for an attribute is derived from the distribution of the ratio of individual coefficients. Since the cost coefficient enters the denominator, its distribution plays a major role in the distribution of WTP. Depending on the choice of distribution for the cost coefficient, and its implied range, the distribution of WTP may or may not have finite moments. In this paper, we identify a criterion to determine whether, with a given distribution for the cost coefficient, the distribution of WTP has finite moments. Using this criterion, we show that some popular distributions used for the cost coefficient in random coefficient models, including normal, truncated normal, uniform and triangular, imply infinite moments for the distribution of WTP, even if truncated or bounded at zero. We also point out that relying on simulation approaches to obtain moments of WTP from the estimated distribution of the cost and attribute coefficients can mask the issue by giving finite moments when the true ones are infinite.     

Exploring airline passengers’ willingness to pay for carbon offsets

This study examines airline passengers’ willingness to pay for carbon-offsets. Using the contingent valuation method of double-bounded dichotomous choice format and a survey of over 1000 Taiwanese passengers flying to countries in Asia, Europe, North America, and Oceania to gauge their willingness-to-pay for airline carbon-offsets. The results suggest that despite the trip characteristics and personal background, air travel passengers’ knowledge and perceptions of the carbon-offset scheme also greatly influence the stated willingness to pay.     

Car drivers' willingness to pay for not losing their driving licence

The aim of this article is to discuss theoretically and to study empirically how Norwegian drivers' willingness to pay (WP) for not losing their driving licence vary with their personal characteristics. The theoretical discussion and empirical results are based on standard microeconomic theory and contingent valuation, respectively. The WP values increase concavely with the length of the suspension period of the driving licence and differ greatly between drivers. They increase significantly with a driver's income, dependence on the car at work and driving experience. Moreover, male drivers, young drivers and drivers living in rural areas have higher WP values than their counterparts. Consequently, driving licence suspension will deter drivers to different extents. The relative impacts of the above explanatory variables on the WPs are, broadly speaking, independent of the length of the suspension period.     

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.     

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.     

Estimating the willingness to pay and value of risk reduction for car occupants in the road environment

In recent years there has been a re-focus on the valuation of a statistical life from the ex post or human capital method to an ex ante willingness to pay (WTP) approach. This is in part a recognition that we may have been undervaluing the cost of fatalities and injuries to society associated with crashes, but also a strong belief in the need to focus on establishing the amount, ex ante, that individuals are willing to pay to reduce the risk of exposure to circumstances that might lead to death or degree of injury on the road network. This study has developed a framework in which to identify the degree of preference heterogeneity in willingness to pay by individuals who are drivers or passengers in cars to avoid being killed or injured. A stated choice experiment approach is developed. The empirical setting is a choice of route for a particular trip that a sample of individuals periodically undertakes in Australia. The particular trip is described in enough detail to provide the respondent with a familiar market environment, providing all the relevant background information required for making a decision. Mixed logit models are estimated to obtain the marginal (dis)utilities associated with each influence on the choice amongst the attribute packages offered in the stated choice scenarios. These estimates are used to obtain the WTP distributions for fatality and injury avoidance, which are then aggregated to obtain estimates of the value of risk reduction (VRR), of which the fatality class is also known as the value of a statistical life (VSL).     

Tollroads are only part of the overall trip: the error of our ways in past willingness to pay studies

With rare exception, actual tollroad traffic in many countries has failed to reproduce forecast traffic levels, regardless of whether the assessment is made after an initial year of operation or as long as 10 years after opening. Pundits have offered many reasons for this divergence, including optimism bias, strategic misrepresentation, the promise to equity investors of early returns on investment, errors in land use forecasts, and specific assumptions underlying the traffic assignment models used to develop traffic forecasts. One such assumption is the selection of a behaviourally meaningful value of travel time savings (VTTS) for use in a generalised cost or generalised time user benefit expression that is the main behavioural feature of the traffic assignment (route choice) model. Numerous empirical studies using stated choice experiments have designed choice sets of alternatives as if users choose a tolled route or a free route under the (implied) assumption that the tolled route is tolled for the entire trip. Reality is often very different, with a high incidence of use of a non-tolled road leading into and connecting out of a tolled link. In this paper we recognise this feature of route choice and redesign the stated choice experiment to account for it. Furthermore, this study is a follow up to a previous study undertaken before a new toll road was in place, and it benefits from real exposure to the new toll road. We find that the VTTS is noticeably reduced, and if the VTTS is a significant contributing influence on errors on traffic forecasts, then the lower estimates make sense behaviourally.     

Analyzing the preference for non-exclusive forms of telecommuting: Modeling and policy implications

This study examines three models of the individual's preference for home- and center-based telecommuting. Issues concerning the estimation of discrete models when the alternatives are non-exclusive are discussed. Two binary logit models are presented, one on the preference to telecommute from a center versus not telecommuting from a center (adjusted ² = 0.24), and the other on the preference to telecommute from a center over telecommuting from home (adjusted ² = 0.64). A nested logit model is also estimated on the following four alternatives: preferring not to telecommute, preferring either form of telecommuting, preferring to telecommute from home, and preferring to telecommute from a center (adjusted ² = 0.35).The results of the models illustrated the importance of attitudinal measures in measuring an individual's preference to telecommute. Oblique factor scores representing workplace interaction, stress, workaholism, internal control, and commute stress were statistically significant in some or all of the models. Other explanatory variables which were found to be consistently significant were education, job suitability, and age. Most respondents preferred either to telecommute from home or were indifferent between either form of telecommuting, which raises the question as to whether there really is a sizeable market niche to be filled by telecommuting centers, and hence whether they may make a significant contribution to transportation demand reduction.     

Valuing of attributes influencing the attractiveness of suburban train service in Mumbai city: A stated preference approach

The paper presents valuing of qualitative and quantitative travel attributes influencing the attractiveness of suburban train service in Mumbai city, India. A stated preference experiment is designed to capture the data of sub-urban train mode choice behavior. The behavioral data are analyzed using different modeling techniques such as multinomial logit (MNL) and mixed logit (ML). In ML model, the random parameters are assumed to follow constrained triangular distribution, where mean equals its spread. The decomposition of preference heterogeneity around the mean estimate of random parameter is also investigated using ML model. The study shows the influence of headway time and train ride time associated with a particular crowding level (expressed in density of standing passengers/m²) in choosing the sub-urban train mode by calculating their willingness-to-pay (WTP) values and highlights the importance of WTP for addressing policy issues in the reduction of in-vehicle crowding level. The present study documents new findings of the effect of crowding level on train ride time in the context of a developing country and suggests some important directions for future suburban train transport crowding valuation research.     

Willingness to pay for improving service quality in a multimodal area

Travellers use the installations at multimodal areas to transfer from one mode of transport to another. In many cases these installations are called interchanges. This article characterises the users of transport interchanges to determine the fundamental attributes which they most value when they pass through the area. A Stated Choice survey is designed and administered and Mixed Logit models are estimated to calculate willingness to pay levels for three main attributes: transfer time, the quality of the available information and the services provided in the area. Travellers place most value on the quality of the information they receive and the available services rather than on transfer time, which contradicts the widely held opinion of experts in the field. This opens up new possibilities in the design of modern interchanges which should concentrate more on being welcoming areas with many information points rather than being based around minimising transfer times.     

德国物流发展规律考察报告

德国物流行业2007年产值超过2000亿欧元,位列经贸和汽车工业之后排在第三位,物流成本占国内生产总值的比重在10%以下.物流产业社会化和综合服务水平高,物流企业注重物流技术研究和专业化、规模化经营,基本实现了以运输合理化、仓储标准化、装卸机械化、加工配送一体化和信息管理网络化为标志的现代综合物流管理与服务.     

Stated willingness to participate in travel surveys: a cross-country and cross-methods comparison

Transportation - Travel surveys are the primary source of data that feed into the analysis and modeling of travel behaviour. Numerous studies have found that the survey method, be it pen and paper,...     

Willingness to pay for freight travel time savings: contrasting random utility versus random valuation

Transportation - There is a considerable gap between the existing knowledge used to estimate the value of time in passenger transport when compared with the framework of analysis developed for...     

Advances in population synthesis: fitting many attributes per agent and fitting to household and person margins simultaneously

Agent-based microsimulation models of transportation, land use or other socioeconomic processes require an initial synthetic population derived from census data, conventionally created using the iterative proportional fitting (IPF) procedure. This paper introduces a novel computational method that allows the synthesis of many more attributes and finer attribute categories than previous approaches, both of which are long-standing limitations discussed in the literature. Additionally, a new approach is used to fit household and person zonal attribute distributions simultaneously. This technique was first adopted to address limitations specific to Canadian census data, but could also be useful in U.S. and other applications. The results of each new method are evaluated empirically in terms of goodness-of-fit.     

Responses to complex pricing signals: Theory,evidence and implications for road pricing

There is a potential tension between the theoretical desirability of highly differentiated tariff structures and the ability of consumers to respond effectively to them. Evidence from studies of road pricing schemes and tolls, from other transport modes, and from other industries (notably telecommunications), is reviewed and its transferability assessed. Relevant models of human decision making (notably Prospect Theory, Risk Aversion, Ambiguity Avoidance and Bounded Rationality) are explored, and the use and efficiency of heuristics to deal with complex situations is discussed.It is concluded that people have a strong preference for simple tariffs but that they are able to respond to quite complex tariffs provided that they have a clear and logical structure. However, people’s difficulties in estimating distance will severely limit the accuracy of their estimates of distance-based charges and their response to complex pricing signals will be influenced by their attitude to the fairness of the charge. These conclusions are summarised in a general model of response to complex prices.The paper, which reports and extends a study conducted for the UK Department for Transport, concludes by considering the implications for the design and performance of road pricing schemes (an inherent problem being that the theoretically optimum, first-best, pricing structure might be so complicated and dynamically variable that it would be unreasonable to expect road users to predict, let alone respond to, the prices on any given road at any given time – a simpler pricing structure might therefore yield a better overall result).     

You (expect to) get what you pay for: A system approach to delay, fare, and complaints

In this paper, an analytical framework integrating delay, fare, and complaints with passenger air travel has been laid out. Examining aggregate monthly data for US domestic air travel, we have identified causal relationships among fare, complaints, and levels of delay. An analytical framework is proposed that formalizes these relationships in an integrated manner. This integrated framework is then estimated in a set of simultaneous equations by using 118 months of data from January 1997 to October 2006. Results show that complaints are influenced by levels of delays. However, complaints are positively influenced by average yield. These findings lead us to support the central hypothesis that complaints are responsive to levels of delays, but they tend to vary according to fare. That is, air travelers are less likely to complain in return for lower fares, even when faced with the same or even higher levels of delays. These findings have important policy implications, including the passengers’ bill of rights and regulator’s choice between market and operational performances.