IDEAS home Printed from https://ideas.repec.org/a/eee/eejocm/v5y2012i3p157-175.html
   My bibliography  Save this article

Randomness in preference orderings, outcomes and attribute tastes: An application to journey time risk

Author

Listed:
  • Batley, Richard
  • Ibáñez, J. Nicolás

Abstract

Within the broad area of probabilistic modelling of individual discrete choice, we develop three strands of discussion. First, we outline a theoretical framework for the modelling of individual discrete choice under risk, distinguishing between three specific sources of randomness; in preference orderings, in outcomes, and in attribute tastes. Second, we apply this theoretical modelling framework to the domain of journey time risk (or ‘reliability’), a subject which has acquired prominence in the transportation policies of many countries. Third, we apply the modelling framework empirically, based upon a Stated Preference experiment of 2395 rail travellers choosing between alternative journeys embodying different levels of journey time risk. Across the sample of travellers, we estimate a mean value of scheduled journey time of 25.62pence/min, against a median of 18.55pence/min. We further estimate a mean ‘reliability ratio’ (ratio of the value of standard deviation of journey time to the value of scheduled journey time) of 2.07, against a median of 0.85. The properties of the distribution of the reliability ratio suggest a predominant behaviour of aversion to journey time risk.

Suggested Citation

  • Batley, Richard & Ibáñez, J. Nicolás, 2012. "Randomness in preference orderings, outcomes and attribute tastes: An application to journey time risk," Journal of choice modelling, Elsevier, vol. 5(3), pages 157-175.
    • Handle: RePEc:eee:eejocm:v:5:y:2012:i:3:p:157-175
    DOI: 10.1016/j.jocm.2013.03.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1755534513000043
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jocm.2013.03.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. M. S. Feldstein, 1969. "Mean-Variance Analysis in the Theory of Liquidity Preference and Portfolio Selection," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(1), pages 5-12.
    2. Loomes, Graham & Sugden, Robert, 1995. "Incorporating a stochastic element into decision theories," European Economic Review, Elsevier, vol. 39(3-4), pages 641-648, April.
    3. de Palma, André & Picard, Nathalie, 2005. "Route choice decision under travel time uncertainty," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(4), pages 295-324, May.
    4. Batley, Richard, 2007. "Marginal valuations of travel time and scheduling, and the reliability premium," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(4), pages 387-408, July.
    5. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    6. Hollander, Yaron, 2006. "Direct versus indirect models for the effects of unreliability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(9), pages 699-711, November.
    7. Fosgerau, Mogens & Karlström, Anders, 2010. "The value of reliability," Transportation Research Part B: Methodological, Elsevier, vol. 44(1), pages 38-49, January.
    8. K. Borch, 1969. "A Note on Uncertainty and Indifference Curves," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(1), pages 1-4.
    9. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    10. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    11. Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-479, June.
    12. Richard Batley, 2008. "On Ordinal Utility, Cardinal Utility and Random Utility," Theory and Decision, Springer, vol. 64(1), pages 37-63, February.
    13. Bates, John & Polak, John & Jones, Peter & Cook, Andrew, 0. "The valuation of reliability for personal travel," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(2-3), pages 191-229, April.
    14. Daniel McFadden, 1975. "The Revealed Preferences of a Government Bureaucracy: Theory," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 401-416, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiao Chen & Carolina Osorio & Bruno Filipe Santos, 2019. "Simulation-Based Travel Time Reliable Signal Control," Transportation Science, INFORMS, vol. 53(2), pages 523-544, March.
    2. Li, Manzi & Jiang, Gege & Lo, Hong K., 2022. "Pricing strategy of ride-sourcing services under travel time variability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    3. Hossan, Md Sakoat & Asgari, Hamidreza & Jin, Xia, 2016. "Investigating preference heterogeneity in Value of Time (VOT) and Value of Reliability (VOR) estimation for managed lanes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 638-649.
    4. Zhaoqi Zang & Xiangdong Xu & Kai Qu & Ruiya Chen & Anthony Chen, 2022. "Travel time reliability in transportation networks: A review of methodological developments," Papers 2206.12696, arXiv.org, revised Jul 2022.
    5. Jiaqi Ge & J. Gareth Polhill, 2016. "Exploring the Combined Effect of Factors Influencing Commuting Patterns and CO2 Emissions in Aberdeen Using an Agent-Based Model," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 19(3), pages 1-11.
    6. Sun, Lijun & Tirachini, Alejandro & Axhausen, Kay W. & Erath, Alexander & Lee, Der-Horng, 2014. "Models of bus boarding and alighting dynamics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 447-460.
    7. Michael Moutoussis & Raymond J Dolan & Peter Dayan, 2016. "How People Use Social Information to Find out What to Want in the Paradigmatic Case of Inter-temporal Preferences," PLOS Computational Biology, Public Library of Science, vol. 12(7), pages 1-17, July.
    8. Wijayaratna, Kasun P. & Dixit, Vinayak V., 2016. "Impact of information on risk attitudes: Implications on valuation of reliability and information," Journal of choice modelling, Elsevier, vol. 20(C), pages 16-34.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhaoqi Zang & Xiangdong Xu & Kai Qu & Ruiya Chen & Anthony Chen, 2022. "Travel time reliability in transportation networks: A review of methodological developments," Papers 2206.12696, arXiv.org, revised Jul 2022.
    2. Zheng Li & Alejandro Tirachini & David A. Hensher, 2012. "Embedding Risk Attitudes in a Scheduling Model: Application to the Study of Commuting Departure Time," Transportation Science, INFORMS, vol. 46(2), pages 170-188, May.
    3. Li, Hao & Tu, Huizhao & Hensher, David A., 2016. "Integrating the mean–variance and scheduling approaches to allow for schedule delay and trip time variability under uncertainty," Transportation Research Part A: Policy and Practice, Elsevier, vol. 89(C), pages 151-163.
    4. Börjesson, Maria & Eliasson, Jonas & Franklin, Joel, 2012. "Valuations of travel time variability in scheduling versus mean-variance models," Working papers in Transport Economics 2012:2, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    5. Carrion, Carlos & Levinson, David, 2012. "Value of travel time reliability: A review of current evidence," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(4), pages 720-741.
    6. Nicolas Coulombel & André de Palma, 2014. "The marginal social cost of travel time variability," Post-Print hal-01100105, HAL.
    7. Engelson, Leonid & Fosgerau, Mogens, 2011. "Additive measures of travel time variability," Transportation Research Part B: Methodological, Elsevier, vol. 45(10), pages 1560-1571.
    8. Xiao, Yu & Coulombel, Nicolas & Palma, André de, 2017. "The valuation of travel time reliability: does congestion matter?," Transportation Research Part B: Methodological, Elsevier, vol. 97(C), pages 113-141.
    9. Nicolas Coulombel & André De Palma, 2014. "Variability of Travel Time, Congestion, and the Cost of Travel," Mathematical Population Studies, Taylor & Francis Journals, vol. 21(4), pages 220-242, December.
    10. de Jong, Gerard C. & Bliemer, Michiel C.J., 2015. "On including travel time reliability of road traffic in appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 80-95.
    11. Abegaz, Dereje & Hjorth, Katrine & Rich, Jeppe, 2017. "Testing the slope model of scheduling preferences on stated preference data," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 409-436.
    12. Benezech, Vincent & Coulombel, Nicolas, 2013. "The value of service reliability," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 1-15.
    13. Börjesson, Maria & Eliasson, Jonas, 2011. "On the use of "average delay" as a measure of train reliability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(3), pages 171-184, March.
    14. Li, Baibing, 2019. "Measuring travel time reliability and risk: A nonparametric approach," Transportation Research Part B: Methodological, Elsevier, vol. 130(C), pages 152-171.
    15. Engelson, Leonid & Fosgerau, Mogens, 2016. "The cost of travel time variability: Three measures with properties," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 555-564.
    16. Xiao, Yu & Fukuda, Daisuke, 2015. "On the cost of misperceived travel time variability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 75(C), pages 96-112.
    17. Fosgerau, Mogens & Engelson, Leonid, 2011. "The value of travel time variance," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 1-8, January.
    18. Fosgerau, Mogens & Engelson, Leonid & Franklin, Joel P., 2014. "Commuting for meetings," Journal of Urban Economics, Elsevier, vol. 81(C), pages 104-113.
    19. Soriguera, Francesc, 2014. "On the value of highway travel time information systems," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 294-310.
    20. Zhaoqi Zang & Richard Batley & Xiangdong Xu & David Z. W. Wang, 2022. "On the value of distribution tail in the valuation of travel time variability," Papers 2207.06293, arXiv.org, revised Dec 2023.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eejocm:v:5:y:2012:i:3:p:157-175. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-choice-modelling .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.