Are consumers willing to pay to let cars drive for them? Analyzing response to autonomous vehicles

Autonomous vehicles use sensing and communication technologies to navigate safely and efficiently with little or no input from the driver. These driverless technologies will create an unprecedented revolution in how people move, and policymakers will need appropriate tools to plan for and analyze the large impacts of novel navigation systems. In this paper we derive semiparametric estimates of the willingness to pay for automation. We use data from a nationwide online panel of 1260 individuals who answered a vehicle-purchase discrete choice experiment focused on energy efficiency and autonomous features. Several models were estimated with the choice microdata, including a conditional logit with deterministic consumer heterogeneity, a parametric random parameter logit, and a semiparametric random parameter logit. We draw three key results from our analysis. First, we find that the average household is willing to pay a significant amount for automation: about $3500 for partial automation and $4900 for full automation. Second, we estimate substantial heterogeneity in preferences for automation, where a significant share of the sample is willing to pay above $10,000 for full automation technology while many are not willing to pay any positive amount for the technology. Third, our semiparametric random parameter logit estimates suggest that the demand for automation is split approximately evenly between high, modest and no demand, highlighting the importance of modeling flexible preferences for emerging vehicle technology.     

Consumers’ willingness to pay for alternative fuel vehicles: A comparative discrete choice analysis between the US and Japan

This paper conducts a comparative discrete choice analysis to estimate consumers’ willingness to pay (WTP) for electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) on the basis of the same stated preference survey carried out in the US and Japan in 2012. We also carry out a comparative analysis across four US states. We find that on average US consumers are more sensitive to fuel cost reductions and alternative fuel station availability than are Japanese consumers. With regard to the comparative analysis across the four US states, consumers’ WTP for a fuel cost reduction in California is considerably greater than in the other three states. We use the estimates obtained in the discrete choice analysis to examine the EV/PHEV market shares under several scenarios. In a base case scenario with relatively realistic attribute levels, conventional gasoline vehicles still dominate both in the US and Japan. However, in an innovation scenario with a significant purchase price reduction, we observe a high penetration of alternative fuel vehicles both in the US and Japan. We illustrate the potential use of a discrete choice analysis for forward-looking policy analysis, with the future opportunity to compare its predictions against actual revealed choices. In this case, increased purchase price subsidies are likely to have a significant impact on the market shares of alternative fuel vehicles.     

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.     

Not bored yet - Revisiting respondent fatigue in stated choice experiments

Stated choice surveys are used extensively in the study of choice behaviour across many different areas of research, notably in transport. One of their main characteristics in comparison with most types of revealed preference (RP) surveys is the ability to capture behaviour by the same respondent under varying choice scenarios. While this ability to capture multiple choices is generally seen as an advantage, there is a certain amount of unease about survey length. The precise definition about what constitutes a large number of choice tasks however varies across disciplines, and it is not uncommon to see surveys with up to twenty tasks per respondent in some areas. The argument against this practice has always been one of reducing respondent engagement, which could be interpreted as a result of fatigue or boredom, with frequent reference to the findings of Bradley and Daly (1994) who showed a significant drop in utility scale, i.e. an increase in error, as a respondent moved from one choice experiment to the next, an effect they related to respondent fatigue. While the work by Bradley and Daly has become a standard reference in this context, it should be recognised that not only was the fatigue part of the work based on a single dataset, but the state-of-the-art and the state-of-practice in stated choice survey design and implementation has moved on significantly since their study. In this paper, we review other literature and present a more comprehensive study investigating evidence of respondent fatigue across a larger number of different surveys. Using a comprehensive testing framework employing both Logit and mixed Logit structures, we provide strong evidence that the concerns about fatigue in the literature are possibly overstated, with no clear decreasing trend in scale across choice tasks in any of our studies. For the data sets tested, we find that accommodating any scale heterogeneity has little or no impact on substantive model results, that the role of constants generally decreases as the survey progresses, and that there is evidence of significant attribute level (as opposed to scale) heterogeneity across choice tasks.     

A new estimation approach for the multiple discrete–continuous probit (MDCP) choice model

This paper develops a blueprint (complete with matrix notation) to apply Bhat’s (2011) Maximum Approximate Composite Marginal Likelihood (MACML) inference approach for the estimation of cross-sectional as well as panel multiple discrete–continuous probit (MDCP) models. A simulation exercise is undertaken to evaluate the ability of the proposed approach to recover parameters from a cross-sectional MDCP model. The results show that the MACML approach does very well in recovering parameters, as well as appears to accurately capture the curvature of the Hessian of the log-likelihood function. The paper also demonstrates the application of the proposed approach through a study of individuals’ recreational (i.e., long distance leisure) choice among alternative destination locations and the number of trips to each recreational destination location, using data drawn from the 2004 to 2005 Michigan statewide household travel survey.     

Stochastic frontier estimation of budgets for Kuhn–Tucker demand systems: Application to activity time-use analysis

We propose a stochastic frontier approach to estimate budgets for the multiple discrete–continuous extreme value (MDCEV) model. The approach is useful when the underlying time and/or money budgets driving a choice situation are unobserved, but the expenditures on the choice alternatives of interest are observed. Several MDCEV applications hitherto used the observed total expenditure on the choice alternatives as the budget to model expenditure allocation among choice alternatives. This does not allow for increases or decreases in the total expenditure due to changes in choice alternative-specific attributes, but only allows a reallocation of the observed total expenditure among different alternatives. The stochastic frontier approach helps address this issue by invoking the notion that consumers operate under latent budgets that can be conceived (and modeled) as the maximum possible expenditure they are willing to incur. The proposed method is applied to analyze the daily out-of-home activity participation and time-use patterns in a survey sample of non-working adults in Florida. First, a stochastic frontier regression is performed on the observed out-of-home activity time expenditure (OH-ATE) to estimate the unobserved out-of-home activity time frontier (OH-ATF). The estimated frontier is interpreted as a subjective limit or maximum possible time individuals can allocate to out-of-home activities and used as the time budget governing out-of-home time-use choices in an MDCEV model. The efficacy of this approach is compared with other approaches for estimating time budgets for the MDCEV model, including: (a) a log-linear regression on the total observed expenditure for out-of-home activities and (b) arbitrarily assumed, constant time budgets for all individuals in the sample. A comparison of predictive accuracy in time-use patterns suggests that the stochastic frontier and log-linear regression approaches perform better than arbitrary assumptions on time budgets. Between the stochastic frontier and log-linear regression approaches, the former results in slightly better predictions of activity participation rates while the latter results in slightly better predictions of activity durations. A comparison of policy simulations demonstrates that the stochastic frontier approach allows for the total out-of-home activity time expenditure to either expand or shrink due to changes in alternative-specific attributes. The log-linear regression approach allows for changes in total time expenditure due to changes in decision-maker attributes, but not due to changes in alternative-specific attributes.