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Catching the Tail: Empirical Identification of the Distribution of the Value of Travel Time

Author

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  • Börjesson, Maria
  • Fosgerau, Mogens
  • Algers, Staffan
Abstract
Recent methodological advances in discrete choice analysis in combination with certain stated choice experiments have allowed researchers to check empirically the identification of the distribution of latent variables such as the value of travel time (VTT). Lack of identification is likely to be common and the consequences are severe. E.g., the Danish value of time study found the 15% right tail of the VTT distribution to be unidentified, making it impossible to estimate the mean VTT without resorting to strong assumptions with equally strong impact on the resulting estimate. This paper analyses data generated from a similar choice experiment undertaken in Sweden during 2007-2008 in which the range of trade-off values between time and money was significantly increased relative to the Danish experiment. The results show that this change allowed empirical identification of effectively the entire VTT distribution. In addition to informing the design of future choice experiments, the results are also of interest as a validity test of the stated choice methodology. Failure in identifying the right tail of the VTT would have made it difficult to maintain that respondents’ behaviour is consistent with utility maximization in the sense intended by the experimenter.

Suggested Citation

  • Börjesson, Maria & Fosgerau, Mogens & Algers, Staffan, 2012. "Catching the Tail: Empirical Identification of the Distribution of the Value of Travel Time," MPRA Paper 69099, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69099
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    Cited by:

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    2. Paul Koster & Hans Koster, 2013. "Commuters' Preferences for Fast and Reliable Travel," Tinbergen Institute Discussion Papers 13-075/VIII, Tinbergen Institute, revised 30 Apr 2015.
    3. Tirachini, Alejandro & Hurtubia, Ricardo & Dekker, Thijs & Daziano, Ricardo A., 2017. "Estimation of crowding discomfort in public transport: Results from Santiago de Chile," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 311-326.
    4. Börjesson, Maria & Eliasson, Jonas, 2012. "The value of time and external benefits in bicycle appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(4), pages 673-683.
    5. Fanchao Liao & Eric Molin & Harry Timmermans & Bert van Wee, 2020. "Carsharing: the impact of system characteristics on its potential to replace private car trips and reduce car ownership," Transportation, Springer, vol. 47(2), pages 935-970, April.
    6. Börjesson, Maria & Eliasson, Jonas, 2014. "Experiences from the Swedish Value of Time study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 144-158.
    7. Fosgerau, Mogens & Börjesson, Maria, 2015. "Manipulating a stated choice experiment," Journal of choice modelling, Elsevier, vol. 16(C), pages 43-49.
    8. Manuel Ojeda-Cabral & Stephane Hess & Richard Batley, 2018. "Understanding valuation of travel time changes: are preferences different under different stated choice design settings?," Transportation, Springer, vol. 45(1), pages 1-21, January.
    9. Koster, Paul R. & Koster, Hans R.A., 2015. "Commuters’ preferences for fast and reliable travel: A semi-parametric estimation approach," Transportation Research Part B: Methodological, Elsevier, vol. 81(P1), pages 289-301.
    10. Andrew Daly, 2013. "Forecasting behaviour: with applications to transport," Chapters, in: Stephane Hess & Andrew Daly (ed.), Choice Modelling, chapter 2, pages 48-72, Edward Elgar Publishing.
    11. Wiktor Budziński & Danny Campbell & Mikołaj Czajkowski & Urška Demšar & Nick Hanley, 2018. "Using Geographically Weighted Choice Models to Account for the Spatial Heterogeneity of Preferences," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 606-626, September.
    12. Shi, Haolun & Yin, Guosheng, 2018. "Boosting conditional logit model," Journal of choice modelling, Elsevier, vol. 26(C), pages 48-63.
    13. Train, Kenneth, 2016. "Mixed logit with a flexible mixing distribution," Journal of choice modelling, Elsevier, vol. 19(C), pages 40-53.
    14. Börjesson , Maria, 2012. "Valuing perceived insecurity associated with use of and access to public transport," Working papers in Transport Economics 2012:9, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    15. Börjesson, Maria, 2012. "Inter-temporal variation in the travel time and travel cost parameters of transport models," Working papers in Transport Economics 2012:16, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    16. Hancock, Thomas O. & Hess, Stephane & Daly, Andrew & Fox, James, 2020. "Using a sequential latent class approach for model averaging: Benefits in forecasting and behavioural insights," Transportation Research Part A: Policy and Practice, Elsevier, vol. 139(C), pages 429-454.
    17. 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.
    18. Stephane Hess & Andrew Daly & Maria Börjesson, 2020. "A critical appraisal of the use of simple time-money trade-offs for appraisal value of travel time measures," Transportation, Springer, vol. 47(3), pages 1541-1570, June.
    19. Hess, Stephane & Daly, Andrew & Dekker, Thijs & Cabral, Manuel Ojeda & Batley, Richard, 2017. "A framework for capturing heterogeneity, heteroskedasticity, non-linearity, reference dependence and design artefacts in value of time research," Transportation Research Part B: Methodological, Elsevier, vol. 96(C), pages 126-149.
    20. Sander Cranenburgh & Marco Kouwenhoven, 2021. "An artificial neural network based method to uncover the value-of-travel-time distribution," Transportation, Springer, vol. 48(5), pages 2545-2583, October.
    21. Caspar G. Chorus, 2014. "Capturing alternative decision rules in travel choice models: a critical discussion," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 13, pages 290-310, Edward Elgar Publishing.

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    More about this item

    Keywords

    value of time; transport; discrete choice;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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