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On the cost of misperceived travel time variability

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  • Xiao, Yu
  • Fukuda, Daisuke
Abstract
Because individuals may misperceive travel time distributions, using the implied reduced form of the scheduling model might fall short of capturing all costs of travel time variability. We reformulate a general scheduling model employing rank-dependent utility theory and derive two special cases as econometric specifications to study these uncaptured costs. It is found that reduced-form expected cost functions still have a mean–variance form when misperception is considered, but the value of travel time variability is higher. We estimate these two models with stated-preference data and calculate the empirical cost of misperception. We find that: (i) travelers are mostly pessimistic and thus tend to choose departure times too early to achieve a minimum cost, (ii) scheduling preferences elicited using a stated-choice method can be relatively biased if probability weighting is not considered, and (iii) the extra cost of misperceiving the travel time distribution might be nontrivial when time is valued differently over the time of day and is substantial for some people.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:transa:v:75:y:2015:i:c:p:96-112
    DOI: 10.1016/j.tra.2015.03.014
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    More about this item

    Keywords

    Travel time variability; Schedule delay; Departure time choice; Rank-dependent utility;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • 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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