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.     

Credible commitment and congestion pricing

Transportation analysts frequently assert that congestion pricing’s political obstacles can be overcome through astute use of the toll revenue pricing generates. Such “revenue recycling,” however, implies that the collectors of the toll revenue will not be its final recipients, meaning that any revenue recipient must believe that the revenue collector will honor promises to deliver the money. This raises the potential for credible commitment problems. Promises to spend revenue can solve one political problem, because revenue is an easy benefit to understand, but create another one, because revenue is easy to divert. Revenue recycling may therefore not be a promising way to build political support for congestion pricing. We highlight the role commitment problems have played efforts to implement congestion pricing, using examples from around the world and then focusing on California. Because congestion reduction is a more certain benefit than any particular use of the toll revenue, demonstration projects, rather than revenue promises, will be key to pricing’s political success.     

Exploring the relationship between perceived acceptability and referendum voting support for alternative road pricing schemes

A dominant theme in the debate on road pricing (RP) reform is securing buy in from all key stakeholders as a pre-condition for gaining support from politicians. This paper explores the key influences and the extent to which particular RP schemes are acceptable to the community at large, and how this translates into support if a scheme were subject to a vote in a referendum. Using data collected in Sydney in 2012 from a sample of car users, we estimate a recursive simultaneous bivariate probit model that recognises the endogeneity effect of scheme acceptability on voting plans. We find that there is a very strong link between voting intentions and scheme acceptability, and provide a series of direct elasticity estimates of the influence that the cost elements of RP reform schemes have on the joint probability of accepting and voting for a scheme.     

Transport and nation‐state governments worldwide

The Sydney Olympics held in September 2000 provided an opportunity to monitor the planning of transport provision for the world's greatest sporting spectacular. As the single largest major event, the pressures on a city's transport system are enormous, as witnessed by the previous Games in Atlanta and Barcelona. This paper takes a value-chain approach to assess transport performance as a crucial element in the delivery of the Sydney Olympic Games. We begin with a brief overview of strategic value, highlighting some generic aspects of value chains followed by the transport delivery system that came to the fore as significant 'drivers' in the value chain. This is followed by a summary of the effectiveness of the buses, trains, taxis, roads and the airport. A more detailed look is provided of the private bus sector where the problems leading up the opening of the Games received a great deal of media attention. The paper concludes with two stories, one good, one not so good, about transport and the Olympic Games.     

Deregulating the bus industry in Britain — (A) the proposals

Abstract

Over the past five years there has been an unprecedented stream of transport legislation in Britain, and policy has switched significantly towards the provision of services commensurate with market demand. The most important single document has been the recent publication of the White Paper on ‘Buses’ which could bring about dramatic changes in the road passenger transport industry. This introductory section outlines the arguments for and against change and then summarizes the proposals.     

Automatic ticketing on London underground

London Underground is currently going through a revolution in its fare collection systems. Magnetically encoded tickets are being introduced, obtainable from ticket office or self‐service machines, which are then checked automatically at start or finish of journey in the Underground's central zone. The microprocessor controlled equipment handles all accounting aspects of fare collection, because it is all part of a computer‐based network with centralized monitoring and control. The machinery was progressively installed from April 1987 to December 1988. This paper describes the history of the system, describes the new ticket and issuing machines, as well as discussing the development and project management tasks involved.     

Dynamics of LRT growth: Karlsruhe since 1975

The public transport system of Karlsruhe, in particular its innovative services on jointly used heavy rail lines, has received substantial attention throughout the past 20 years. The discussion of the system and of its development has been rather limited in the past, mostly highlighting technical aspects. This paper provides an overview of the development, including the urban development, of the region and of the funding system. The ridership and financial development of the operator is documented in detail. Three case studies focus on the integration of the system development in the general political process of the region and demonstrate the limitations of the operator under its current ownership structures.     

Alternative fuels for transportation

The alternatives to the oil based fuels for transportation are considered and analysed. These are the synthetic fuels, made from coal, the liquid petroleum gases of propane and butane, compressed natural gas and methanol. The problems associated with the use of electric vehicles are discussed; the main problem being that of range.

The possible use of hydrogen as a fuel is analysed in some detail. Since its supply can be tied directly to nuclear energy sources, rather than hydrocarbon feed stocks, it could be an alternative in the long term. The main problems of the storage of hydrogen on the vehicle and of its propensity to “back‐fire” into the engine intake are discussed. The first can be ameliorated and the second eliminated by dual fuelling; with petrol. It is advocated that the on‐board storage of hydrogen be by the use of hydrides for private cars. However, it is expected that it may be as liquid hydrogen for some forms of transport and will certainly be in this form for aircraft.     

Grant aiding rural local roads—an alternative approach

The paper points first to the significance of rural road expenditure in Australia and to the limited success of attempts to place grants for these roads within a framework of economic efficiency. Attention is then drawn to the merit good issue and to the findings of recent research which suggest that spatial equity and changing levels of aspiration are important determinants of road user attitudes. From this the authors conclude that disequilibrium between expected and actual road performance levels will be a salient characteristic and that road grants should be directed to reducing this discordance. A methodology for distributing grants is suggested and illustrated by reference to South Australian data.