Shift of reference point and implications on behavioral reaction to gains and losses

It is widely recognized that individual decision-making is subject to the evaluation of gains and losses around a reference point. The estimation of discrete choice models increasingly use data from stated choice experiments which are pivoted around a reference alternative. However, to date, the specification of a reference alternative in transport studies has been fixed, whereas it is common to observe individuals adjusting their preferences according to a change in their reference point. This paper focuses on individual reactions, in a freight choice context, to a negative change in the reference alternative values, identifying the behavioural implications in terms of loss aversion and diminishing sensitivity. The results show a significant adjustment in the valuation of gains and losses around a shifted reference alternative. In particular, we find an average increase in loss aversion for cost and time attributes, and a substantial decrease for punctuality. These findings are translated to significant differences in the willingness to pay and willingness to accept measures, providing supporting evidence of respondents’ behavioural reaction.     

Discrete/continuous econometric models and their application to transport analysis

A wide range of transport‐related decisions involve the linking of discrete choices (e.g. of vehicle choice) and continuous choices (e.g. of vehicle use). In recent years econometricians have developed procedures for integrating such choices into a framework that is both economically and statistically sound. The literature is however somewhat technical. The objective of this paper is to provide a general overview of the basic elements of discrete/continuous econometric modelling with an emphasis on transport applications. It is hoped that such an introduction will demonstrate that the essence of the approach for the practitioner is quite straightforward and can be implemented with widely available computer software.     

Delivering Value for Money to Government through Efficient and Effective Public Transit Service Continuity: Some Thoughts

Abstract

This paper documents some thoughts on the reform agenda in public transit that is occurring throughout the world. The specific focus is on a growing commitment to competitive regulation through competitive tendering, and the efforts by a few governments (notably in Australia) to take control of the tangible assets used by private operators as a mechanism to exercise the opportunity, if so taken, to put services out to competitive tender. The paper reviews the theoretical arguments and empirical evidence on contracting regimes and asset ownership, and the role that government and the operator might play in a setting in which building trusting and collaborative partnerships has merit in delivering services that are in the main funded from the public purse.     

Forecasting automobile petrol demand in Australia: An evaluation of empirical models

Transport fuel consumption and its determinants have received a great deal of attention since the early 1970s. In the literature, different types of modelling methods have been used to estimate petrol demand, each having methodological strengths and weaknesses. This paper is motivated by an ongoing need to review the effectiveness of empirical fuel demand forecasting models, with a focus on theoretical as well as practical considerations in the model-building processes of different model forms. We consider a linear trend model, a quadratic trend model, an exponential trend model, a single exponential smoothing model, Holt’s linear model, Holt–Winters’ model, a partial adjustment model (PAM), and an autoregressive integrated moving average (ARIMA) model. More importantly, the study identifies the difference between forecasts and actual observations of petrol demand in order to identify forecasting accuracy. Given the identified best-forecasting model, Australia’s automobile petrol demand from 2007 through to 2020 is presented under the “business-as-usual” scenario.     

Design and development of a stated choice experiment for interdependent agents: accounting for interactions between buyers and sellers of urban freight services

Stated choice experiments have proven to be a powerful tool in eliciting preferences across a broad range of choice settings. This paper outlines the elements of a group-based experiment designed for interdependent urban freight stakeholders, along with the procedure to administer the questionnaire sequentially. The focus is on the design of a computer-assisted personal survey instrument and the value in disseminating the details of a new approach to design and collect stated choice data for interacting agents. The paper also discusses how to specify a reference alternative, and then how to recruit appropriate real-market or representative decision-making group members to participate in a subsequent phase of the survey, which incorporates the reference alternative and contextual information from an initial phase. The empirical strategy, set out in some detail, provides a new framework within which to understand more fully the role that specific attributes, such as variable user charges, influencing freight distribution chains might play, and who in the supply chain is affected by specific attributes in terms of willingness to pay for the gains in distribution efficiency.

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.     

Distributed work and travel behaviour: The dynamics of interactive agency choices between employers and employees

This paper develops a framework within which multiple agents make discrete choices in respect of a common objective – the determination of participation in distributed work, especially the opportunities and constraints associated with telecommuting. Ideas in discrete choice theory and game theory are combined to define a set of choice experiments in which employees and employers interact in arriving at a choice path in a distributed work context. A state choice experiment with offers and feedback, known as an interactive agency choice experiment (IACE), is empirically investigated in the context of telecommuting options with an exploratory sample of employees and employers in Sydney, Australia. The approach highlights the role of information and negotiation in breaking down the barriers to more flexible work activity, to deliver potential benefits to the transport system such as reduced traffic congestion and environmental sustainability. The paper identifies the types of incentives that an employee/er has to offer the employer/employee in securing effective telecommuting. This revised version was published online in June 2006 with corrections to the Cover Date.     

Trip chaining as a barrier to the propensity to use public transport

Trip chaining is a growing phenomenon in travel and activity behaviour. Individuals increasingly seek out opportunities to minimise the amount of travel required as part of activity fulfilment, given the competing demands on time budgets and their valuation of travel time savings. This search for ways of fulfilling (more) activities with less travel input has produced a number of responses, one of which is trip chaining. A particularly important policy implication of trip chaining is the potential barrier it creates in attracting car users to switch to public transport. This paper seeks to improve our understanding of trip chaining as a barrier to public transport use. A series of discrete choice models are estimated to identify the role that socio-economic and demographic characteristics of households have on the propensity to undertake trip chains of varying degrees of simplicity/complexity that involve use of the car or public transport with an embedded commuting or non-commuting primary purpose. Multinomial logit, nested logit and random parameter logit models are developed and contrasted to establish the gains in relaxing the strict conditions of the multinomial logit model.