IDEAS home Printed from https://ideas.repec.org/a/kap/netspa/v6y2006i2p81-96.html
   My bibliography  Save this article

Confidence Interval for Willingness to Pay Measures in Mode Choice Models

Author

Listed:
  • Raquel Espino
  • Juan Ortúzar
  • Concepción Román

Abstract

We obtain confidence intervals for willingness-to-pay (WTP) measures derived from a mode choice model estimated to analyse travel demand for suburban trips in the two main interurban corridors in Gran Canaria using a mixed RP/SP data base. We considered a specification of the systematic utility that incorporates income effect, and interactions among socioeconomic variables and level-of-service attributes, as well as between travel cost and frequency. As our model provides rather complex expressions of the marginal utilities, we simulated the distribution of the WTP (in general, unknown) from a multivariate Normal distribution of the parameter vector. For every random draw of the parameter vector, the corresponding simulation of the WTP was obtained applying the sample enumeration method to the individuals in the RP database. The extremes of the confidence interval were determined by the percentiles on this distribution. After trying different simulation strategies we observed that the size of the intervals was strongly affected by the outliers as well as by the magnitude of the simulated parameters. In all cases examined the simulated distribution of the corresponding WTP measure presents an asymmetric shape that was very similar for the two model specifications considered. This is consistent with previous findings using a radically different approach. We also observed that the upper extreme of the confidence interval for the value of time in private transport was very unstable for different numbers of random draws. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Raquel Espino & Juan Ortúzar & Concepción Román, 2006. "Confidence Interval for Willingness to Pay Measures in Mode Choice Models," Networks and Spatial Economics, Springer, vol. 6(2), pages 81-96, June.
    • Handle: RePEc:kap:netspa:v:6:y:2006:i:2:p:81-96
    DOI: 10.1007/s11067-006-7694-3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11067-006-7694-3
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11067-006-7694-3?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. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-130, January.
    2. H C W L Williams, 1977. "On the Formation of Travel Demand Models and Economic Evaluation Measures of User Benefit," Environment and Planning A, , vol. 9(3), pages 285-344, March.
    3. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    4. Armstrong, Paula & Garrido, Rodrigo & Ortúzar, Juan de Dios, 0. "Confidence intervals to bound the value of time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(2-3), pages 143-161, April.
    5. Jara-Díaz, Sergio R. & Videla, Jorge, 1989. "Detection of income effect in mode choice: Theory and application," Transportation Research Part B: Methodological, Elsevier, vol. 23(6), pages 393-400, December.
    6. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, November.
    7. J.M.C. Santos Silva, 2004. "Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (2)," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 913-918, September.
    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. Blandin, Lola & Vecchio, Giovanni & Hurtubia, Ricardo & Tiznado-Aitken, Ignacio, 2024. "Car dependency in the urban margins: The influence of perceived accessibility on mode choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 184(C).
    2. Bliemer, Michiel C.J. & Rose, John M., 2013. "Confidence intervals of willingness-to-pay for random coefficient logit models," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 199-214.
    3. Yang, Chih-Wen & Liao, Pei-Han, 2016. "Modeling the joint choice of access modes and flight routes with parallel structure and random heterogeneity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 19-31.
    4. Ibeas, A. & dell’Olio, L. & Bordagaray, M. & Ortúzar, J. de D., 2014. "Modelling parking choices considering user heterogeneity," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 41-49.
    5. Heng Sun & Wayne Forsythe & Nigel Waters, 2007. "Modeling Urban Land Use Change and Urban Sprawl: Calgary, Alberta, Canada," Networks and Spatial Economics, Springer, vol. 7(4), pages 353-376, December.
    6. Upton, Vincent & Dhubháin, Áine Ní & Bullock, Craig, 2012. "Preferences and values for afforestation: The effects of location and respondent understanding on forest attributes in a labelled choice experiment," Forest Policy and Economics, Elsevier, vol. 23(C), pages 17-27.
    7. Nicanor R. Roxas & Alexis M. Fillone, 2016. "Establishing value of time for the inter-island passenger transport of the Western Visayas region, Philippines," Transportation, Springer, vol. 43(4), pages 661-676, July.

    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. Francisco Javier Amador & Rosa Marina González & Juan de Dios Ortúzar, 2004. "Preference heterogeneity and willingness to pay for travel time," Documentos de trabajo conjunto ULL-ULPGC 2004-12, Facultad de Ciencias Económicas de la ULPGC.
    2. Espino, Raquel & de Dios Ortúzar, Juan & Román, Concepción, 2007. "Understanding suburban travel demand: Flexible modelling with revealed and stated choice data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(10), pages 899-912, December.
    3. Delle Site, Paolo & Salucci, Marco Valerio, 2013. "Transition choice probabilities and welfare analysis in random utility models with imperfect before–after correlation," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 215-242.
    4. Lancsar, Emily & Louviere, Jordan & Flynn, Terry, 2007. "Several methods to investigate relative attribute impact in stated preference experiments," Social Science & Medicine, Elsevier, vol. 64(8), pages 1738-1753, April.
    5. Emma McIntosh, 2006. "Using Discrete Choice Experiments within a Cost-Benefit Analysis Framework," PharmacoEconomics, Springer, vol. 24(9), pages 855-868, September.
    6. Varun Raturi & Ashish Verma, 2019. "Competition between High Speed Rail and Conventional Transport Modes: Market Entry Game Analysis on Indian Corridors," Networks and Spatial Economics, Springer, vol. 19(3), pages 763-790, September.
    7. Farsi, Mehdi, 2010. "Risk aversion and willingness to pay for energy efficient systems in rental apartments," Energy Policy, Elsevier, vol. 38(6), pages 3078-3088, June.
    8. Lizin, Sebastien & Van Passel, Steven & Schreurs, Eloi, 2015. "Farmres' Perceived Cost of Land Use restrictions: A Simulated Purchasing Decision Using Dscrete Choice Experiments," 2015 Conference, August 9-14, 2015, Milan, Italy 212054, International Association of Agricultural Economists.
    9. Chandoevwit, Worawan & Wasi, Nada, 2020. "Incorporating discrete choice experiments into policy decisions: Case of designing public long-term care insurance," Social Science & Medicine, Elsevier, vol. 258(C).
    10. Delgado-Lindeman, Maira & Arellana, Julián & Cantillo, Víctor, 2019. "Willingness to pay functions for emergency ambulance services," Journal of choice modelling, Elsevier, vol. 30(C), pages 28-37.
    11. Hackbarth, André & Madlener, Reinhard, 2016. "Willingness-to-pay for alternative fuel vehicle characteristics: A stated choice study for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 89-111.
    12. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    13. Train, Kenneth & Wilson, Wesley W., 2008. "Estimation on stated-preference experiments constructed from revealed-preference choices," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 191-203, March.
    14. Golub, Aaron David, 2003. "Welfare Analysis of Informal Transit Services in Brazil and the Effects of Regulation," University of California Transportation Center, Working Papers qt0pf40632, University of California Transportation Center.
    15. Cantillo, Victor & Serrano, Iván & Macea, Luis F. & Holguín-Veras, José, 2018. "Discrete choice approach for assessing deprivation cost in humanitarian relief operations," Socio-Economic Planning Sciences, Elsevier, vol. 63(C), pages 33-46.
    16. Angel Bujosa & Antoni Riera & Robert Hicks, 2010. "Combining Discrete and Continuous Representations of Preference Heterogeneity: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(4), pages 477-493, December.
    17. Sobolewski, Maciej, 2021. "Measuring consumer well-being from using free-of-charge digital services. The case of navigation apps," Information Economics and Policy, Elsevier, vol. 56(C).
    18. Benjamin Kickhöfer & Dominik Grether & Kai Nagel, 2011. "Income-contingent user preferences in policy evaluation: application and discussion based on multi-agent transport simulations," Transportation, Springer, vol. 38(6), pages 849-870, November.
    19. Tonsor, Glynn T. & Olynk, Nicole J. & Wolf, Christopher A., 2009. "Consumer Preferences for Animal Welfare Attributes: The Case of Gestation Crates," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(3), pages 1-17, December.
    20. José M. Grisolía & Kenneth G. Willis, 2016. "Consumer choice of theatrical productions: a combined revealed preference–stated preference approach," Empirical Economics, Springer, vol. 50(3), pages 933-957, May.

    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:kap:netspa:v:6:y:2006:i:2:p:81-96. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.