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Specification Of A Model To Measure The Value Of Travel Time Savings From Binomial Data

Author

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  • Mogens Fosgerau

    (Danish Transport Research Institute)

Abstract

Using nonparametric methods, the paper examines the specification of a model to evaluate the distribution of willingness-to-pay (WTP) for travel time savings from binomial choice data from a simple time-cost trading experiment involving four public transport modes. A formulation in preference space in terms of constant marginal utilities is rejected in favor of a formulation in log(WTP) space for each mode. Results further indicate that the log(WTP) distribution can be decomposed into an independent random variable and a linear index shifting the location of the log(WTP) distribution, which is useful for parametric modeling. The index strongly indicates that small time savings are valued less than large time savings for all four modes in this experimental choice situation. The sign for journey duration varies significantly between modes, which could be due to self-selection into modes.

Suggested Citation

  • Mogens Fosgerau, 2005. "Specification Of A Model To Measure The Value Of Travel Time Savings From Binomial Data," Urban/Regional 0508008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpur:0508008
    Note: Type of Document - pdf; pages: 31
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    References listed on IDEAS

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    1. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521355643, January.
    2. Lewbel, Arthur & McFadden, Daniel & Linton, Oliver, 2011. "Estimating features of a distribution from binomial data," Journal of Econometrics, Elsevier, vol. 162(2), pages 170-188, June.
    3. David A. Hensher, 2001. "Measurement of the Valuation of Travel Time Savings," Journal of Transport Economics and Policy, University of Bath, vol. 35(1), pages 71-98, January.
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    Cited by:

    1. DE BORGER, Bruno & FOSGERAU, Mogens, 2006. "Discrete choices and the trade off between money and time: Another test of the theory of reference-dependent preferences," Working Papers 2006034, University of Antwerp, Faculty of Business and Economics.
    2. De Borger, Bruno & Fosgerau, Mogens, 2007. "Discrete choices and the trade-off between money and time: A test of the theory of reference-dependent preferences," MPRA Paper 3904, University Library of Munich, Germany.

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    More about this item

    Keywords

    Willingness-to-pay; WTP; value of travel time savings; nonparametric; semiparametric; local logit;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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