Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment

Choice behaviour might be determined by asymmetric preferences whether the consumers are faced with gains or losses. This paper investigates loss aversion and diminishing sensitivity, and analyzes their implications on willingness to pay and willingness to accept measures in a reference pivoted choice experiment in a freight transport framework. The results suggest a significant model fit improvement when preferences are treated as asymmetric, proving both loss aversion and diminishing sensitivity. The implications on willingness to pay and willingness to accept indicators are particular relevant showing a remarkable difference between symmetric and asymmetric model specifications. Not accounting for loss aversion and diminishing sensitivity, when present, produces misleading results and might affect significantly the policy decisions.freight transport, choice experiments, willingness to pay, preference asymmetry

Asymmetric preference formation in willingness to pay estimates in discrete choice models

Individuals when faced with choices amongst a number of alternatives often adopt a variety of processing rules, ranging from simple linear to complex non-linear treatment of each attribute defining the offer of each alternative. In this paper we investigate the presence of asymmetry in preferences to test for reference effects and differential willingness to pay according to whether we are valuing gains or losses. The findings offer clear evidence of an asymmetrical response to increases and decreases in attributes when compared to the corresponding values for a reference alternative, where the degree of asymmetry varies across attributes and population segments

The dark side of making transit irresistible: The example of France

The French experience in developing policies to reduce car use in metropolitan areas is presented in this paper as an illustration of the lack of recognition of the broader set of criteria on which specific policy frameworks should be judged. One of the major challenges, and often failings of policies focussed on reducing car use, is the lack of a structure that ensures that the downside impacts are not relocated to other parts of a system such that potential gains end up being eroded by the potential losses. We draw on experiences throughout France, as well as case studies in Lyon, to highlight the dark side of French transport policy promoting a switch from car to public transit and non-motorised modes, in terms of financial, equity and environmental outcomes.[This paper is based on research undertaken during a sabbatical year (2005–2006) at ITLS Sydney.]French transport policy ; Modal share ; Charging ; Car dominance ; Challenges for public transport

Australian Bushfires and the Future

The summer fires in Australia mark a cataclysmic reminder that climate change is hurting our planet and that we need to recognise it and plan for a future that minimises the risk to humans and wildlife

Modelling heterogeneity in response behaviour towards a sequence of discrete choice questions: a latent class approach

There is a growing body of evidence in the non-market valuation literature suggesting that responses to a sequence of discrete choice questions tend to violate the assumptions typically made by analysts regarding independence of responses and stability of preferences. Heuristics such as value learning and strategic misrepresentation have been offered as explanations for these results. While a few studies have tested these heuristics as competing hypotheses, none have investigated the possibility that each explains the response behaviour of a subgroup of the population. In this paper, we make a contribution towards addressing this research gap by presenting an equality-constrained latent class model designed to estimate the proportion of respondents employing each of the proposed heuristics. We demonstrate the model on binary and multinomial choice data sources and find three distinct types of response behaviour. The results suggest that accounting for heterogeneity in response behaviour may be a better way forward than attempting to identify a single heuristic to explain the behaviour of all respondents

STATED PREFERENCE ANALYSIS OF TRAVEL CHOICES: THE STATE OF PRACTICE

Stated preference (SP) methods are widely used in travel behaviour research and practice to identify behavioural responses to choice situations which are not revealed in the market, and where the attribute levels offered by existing choices are modified to such an extent that the reliability of revealed preference models as predictors of response is brought into question. This paper reviews recent developments in the application of SP models which add to their growing relevance in demand modelling and prediction. The main themes addressed include a comparative assessment of choice models and preference models, the importance of scaling when pooling different types of data, especially the appeal of SP data as an enriching strategy in the context of revealed preference models, hierarchical designs when the number of attributes make single experiments too complex for the respondent, and ways of accommodating dynamics (i.e. serial correlation and state dependence) in SP modelling

Information Processing Strategies in Stated Choice Studies: The Implications on Willingness to Pay of Respondents Ignoring Specific Attributes

Individuals processing the information in a stated choice experiment are typically assumed to evaluate each and every attribute offered within and between alternatives and to choose their most preferred alternative. It has always been thought though that some attributes are ignored in this process for many reasons including a coping strategy to handle their perception of the complexity of the choice task. However analysts proceed to estimate discrete choice models as if all attributes have influenced the outcome to some degree. The cognitive processes used to evaluate trade-offs are complex with boundaries often placed on the task to assist the respondent. These boundaries can include adding up attributes (eg components of travel time and cost), prioritising attributes and focussing on the primary influences and ignoring specific attributes. In this paper we investigate the implications of bounding the information processing task by attribute elimination through ignoring one or more attributes. Using a sample of car commuters in Sydney we estimate mixed logit models which assume that all attributes are candidate contributors, and models which assume that certain attributes are ignored (based on supplementary information provided by respondents). We derive individual-respondent parameters using a conditional choice specification of mixed logit, and compare the value of travel time savings distribution under alternative information processing regimes. As expected, assuming that all attributes are not ignored and duly processed, leads to biased estimates of parameters which over-estimate willingness to pay (WTP)

Assessing Data and Modeling Needs for Urban Transport Sector: An Australian Perspective

Managing the transport assets of an urban economy and ensuring that change is in accordance with suitable performance measures requires continuing improvement in analytical power and empirical information. One crucial input in an ongoing review of data and modeling capability for improving planning and policy support in the urban transport sector is a recognition of the role of stakeholders and the impact they can have in supporting the ongoing commitment to implementing a state of practice data and modeling strategy. This paper presents a multi-stage stakeholder assessment of data and modeling needs (primarily in the urban passenger context) in Australia that is required to ensure the continuity of appropriate deliverables to a market of diverse stakeholders. The implementation of the framework of inquiry enables data and modeling agencies to remain current and relevant. Such an exercise should be encouraged from time to time as part of good practice

Cost efficiency under negotiated performance‐based contracts and benchmarking – Are there gains through competitive tendering in the absence of an incumbent public monopolist?

This paper uses data obtained from numerous sources in Australia to assess the extent to which negotiated performance-based contracts with actionable benchmarking can achieve as good as, or better, improvement in cost efficiency compared to competitive tendering when incumbents are not public operators. Stakeholders who promote the position that Government should choose to test the market for value for money through tendering, especially where incumbent operators demonstrate benchmarked cost efficiency, given the primary responsibility to the taxpayer, appear on the evidence in this paper to be inappropriately claiming noticeable benefits to society