Expanding scope of hybrid choice models allowing for mixture of social influences and latent attitudes: Application to intended purchase of electric cars

Recently, policy makers’ expectations about the role of electric cars in reducing emissions have risen substantially. In parallel, academic research on purchase intentions has dramatically increased. Originally, most studies have focused on utility attributes and price. More recently, several hybrid choice models have been estimated to include the impact of attitudes on choice probabilities. In addition, a few studies have caught the attention to social influence. In contributing to this line of research, this paper reports the results of an expanded hybrid choice, which simultaneously estimated all these different effects in a single integrated model of purchase intention. Results indicate that the model performs well. Costs considerations contribute most to the utility of electric cars. Social influence is less important, but there is also evidence that people tend to take it into consideration when there are positive public opinions about electric cars and the market share becomes almost half of friends of their social network. The intention to purchase an electric car is also influenced by attitudes about environmental concerns and technology acceptance.     

The effect of social comparisons on commute well-being

We study the effect of social comparisons on travel happiness and behavior. Social comparisons arise from exchanges of information among individuals. We postulate that the social gap resulting from comparisons is a determinant of “comparative happiness” (i.e. happiness arising from comparisons), which in turn affects subsequent behavior. We develop a modeling framework based on the Hybrid Choice Model that captures the indirect effect of social comparisons on travel choices through its effect on comparative happiness.We present an empirical analysis of one component of this framework. Specifically, we study how perceived differences between experienced commute attributes and those communicated by others affect comparative happiness and consequently overall commute satisfaction. We find that greater comparative happiness arising from favorable comparisons of one’s commute to that of others (e.g. shorter commute time than others, same mode as others for car commuters, and different mode than others for non-motorized commuters) increases overall commute satisfaction or utility.The empirical model develops only the link between social comparisons and happiness in the comparisons-happiness-behavior chain. It is anticipated that the theoretical framework that considers the entire chain will enhance the behavioral realism of “black box” models that do not account for happiness in the link between comparisons and behavior.     

Impact of vehicle usage on consumer choice of hybrid electric vehicles

We analyze the vehicle usage and consumer profile attributes extracted from both National Household Travel Survey and Vehicle Quality Survey data to understand the impact of vehicle usage upon consumers’ choices of hybrid electric vehicles in the US. In addition, the key characteristics of hybrid vehicle drivers are identified to determine the market segmentations of hybrid electric vehicles and the critical attributes to include in the choice model. After a compatibility test of two datasets, a pooled choice model combining both data sources illustrates the significant influences of vehicle usage upon consumers’ choices of hybrid electric vehicles. Even though the data-bases have in the past been used independently to study travel behavior and vehicle quality ratings, here we use them together.     

Correcting for endogeneity in behavioral choice models with social influence variables

While psychologists and behavioral economists emphasize the importance of social influences, an outstanding issue is how to capture such influences in behavioral models used to inform urban planning and policy. In this paper we focus on operational models that do not require explicit knowledge of the individual networks of decision makers. We employ a field effect variable to capture social influences, which is calculated as the percent of population in the peer group that has chosen the specific alternative. We define the peer group based on socio-economic status and spatial proximity of residential location. As in behavioral economics and psychology, the concept is that one is influenced by the choices made by one’s peers. However, using such a social influence variable in a behavioral model causes complications because it is likely endogenous; unobserved factors that impact the peer group also influence the decision maker, yielding correlation between the field effect variable and the error. The contribution of this paper is the use of the Berry, Levinsohn, and Pakes (BLP) method to correct the endogeneity in a choice model. The two-stage BLP introduces constants for each peer group to remove the endogeneity from the choice model (where it is difficult to deal with) and insert it into a linear regression model (where endogeneity is relatively easier to deal with). We test the method using a mode choice data set from the Netherlands and readily available software and find there is an upward bias of the field effect parameter when endogeneity is not corrected. The procedure outlined presents a practical and tractable method for incorporating social influences in choice models.