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.     

Extending stated choice analysis to recognise agent-specific attribute endogeneity in bilateral group negotiation and choice: a think piece

This paper is a think piece on variations in the structure of stated preference studies when modelling the joint preferences of interacting agents who have the power to influence the attribute levels on offer. The approach proposed is an extension of standard stated choice methods, known as ‘stated endogenous attribute level’ (SEAL) analysis. It allows for interactive agents to adjust attribute levels off a base stated choice specification that are within their control, in an effort to reach agreement in an experimental setting. This accomplishes three goals: (1) the ability to place respondents in an environment that more closely matches interactive settings in which some attribute levels are endogenous to a specific agent, should the modeller wish to capture such behaviour; (2) the improved ability of the modeller to capture the behaviour in such settings, including a greater wealth of information on the related interaction processes, rather than simply outcomes; and (3) the expansion of the set of situations that the modeller can investigate using experimental data.

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.

     

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.     

Extracting driving characteristics from heavy goods vehicle tachograph charts

European Union regulations require haulage companies of member states like the UK to keep records of their drivers’ hours of work. All heavy goods vehicles (HGV's) over 7.5 tonnes are fitted with tachographs which record a driver's operating activities (periods of driving, other work and rest). These records are etched onto a laminated chart by various styli, one of which records the vehicle's speed. This paper describes the development and testing of a new technique for extracting individual driving characteristics from the speed trace of an HGV tachograph chart to calculate four parameters: distance travelled, average speed, time travelled and speed variability.

The average speed, time travelled and speed variability were analysed statistically using one‐way analysis of variance tests. Speed variability was found to be particularly useful for identifying differences between individual driver's behaviour. Once differences in behaviours can be identified it may be possible to link certain driving habits to factors such as component wear, accident rates and excessive fuel usage.     

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.