Perceived flexibility of car makes you pay more to save time

The Optima project is not dead! This project took place between 2009 and 2012 and involved 3 labs (CEAT, LASUR, TRANSP-OR). PostBus, a Swiss bus company, wanted to understand mode choice in rural and suburban areas. In particular, a revealed preference survey was conducted in 2009/10. More details:

A new paper using this dataset has been published:

Correcting for endogeneity due to omitted attitudes: Empirical assessment of a modified MIS method using RP mode choice data
In this paper we extend the Multiple Indicator Solution (MIS) so that it can also be used to account for endogeneity when there are interactions between observed and unobserved factors in the specification of the utility function. We develop the theoretical derivation and illustrate it with a revealed preference case study of mode choice. Policy indicators such as time elasticity and value of time are discussed. The results are compared with a logit model and with an Integrated Choice and Latent Variable (ICLV) model. Results show that endogeneity is present in the case study and that the proposed variation of the MIS method is practical and able to account for it. Our proposed method can be seen as a starting point for the practical detection and treatment of this type of endogeneity without the drawbacks of multifold integration.

An information we get from this survey si how flexible car is perceived. Respondents are asked how much they agree with the sentence "With my car I go whenever and wherever". This paper shows that these three people:

  • Alice
    • monthly income: 5000 CHF
    • thinks that car is very flexible
  • Bob
    • monthly income: 7000 CHF
    • thinks that car is somehow flexible
  • Carol
    • monthly income: 9000 CHF
    • thinks that car is not particulary flexible, but doesn't disagree (neutral)

all have the same value of time, i.e., they would all be ready to pay the same amount of money, say 8 francs, to save 10 minutes of their time spent traveling.

It means that thinking car is more flexible (on a scale with 5 possibilities, totally agree, partially agree, neutral, partially disagree, totally disagree) is equivalent to 2000 CHF more in monthly income when it comes to how much you are willing to pay to save time.

From a different point of view, if you - with your given income - think that car is more flexible, you will be ready to pay more to save time.

For the methodology and detailed results, check the paper.

Posted by Antonin Danalet on Wednesday 21 September 2016 at 16:57