Effect of model specification on valuation of travel attributes: a case study of rural feeder service to bus stop

Maitra, Bhargab; Ghosh, Santanu; Das, Sudhanshu Sekhar; Boltze, Manfred

Abstracts

In willingness-to-pay (WTP) studies, stated preference (SP) data are analyzed by developing econometric models. However, the variation of WTP across different model specifications has not been studied adequately. This paper reports a comparison of various econometric models and estimated WTP values with reference to a case study of rural feeder service to bus stop. Econometric models included Multinomial Logit (MNL), Heteroskedastic Extreme Value (HEV), Nested Logit (NL), Covariance Heterogeneity Nested Logit (CHNL), and Random Parameter Logit (RPL). Various econometric models are found to be consistent and acceptable in terms of signs of coefficient estimates, statistical significance of coefficient estimates and overall goodness of fit. The WTP values are found to vary across different model specifications, although the variations are not consistent and predominant for all attributes. In the present case study, the effect of model specification is found predominant on WTP for a reduction in access walking distance. Also, RPL models accounting for deterministic heterogeneity are found superior to other econometric models such as MNL, HEV, NL, CHNL and RPL models accounting for only random heterogeneity. The work highlights the importance of model specification in WTP studies.

willingness to pay; RPL model; rural feeder service; econometric models

Nos estudos que tratam da disposição a pagar ("WTP - willingness-to-pay"), os dados de preferência declarada são analisados por meio do desenvolvimento de modelos econométricos. Todavia, a variação do WTP em diferentes especificações não tem sido estudada adequadamente. Uma comparação entre modelos econométricos, no contexto de valor da WTP, é feito com referência ao estudo de caso de serviços alimentadores de viagens rurais até pontos de ônibus. As especificações testadas incluem: Logit Mutinomial (MNL), Valores Extremos com Heterocedasticidade (HEV), Logit Aninhado (NL), Logit Aninhado com Covariância Heterogenênea (CHNL) e Logit com Parâmetros Aleatórios. Diversos modelos econométricos foram testados para se obter consistência e aceitação dos sinais dos coeficientes estimados, da significância estatística dos coeficientes e, ao fim, um bom grau de ajuste. Os valores da WTP encontrados variam entre os diferentes modelos, contudo as variações não são consistentes e predominantes para todos os atributos. No caso estudado, o efeito do modelo especificado é encontrado predominantemente no WTP para a redução do percurso caminhado a pé. O trabalho destaca a importância da especificação de modelos em estudos de WTP e documenta a comparação entre diferentes especificações para um mesmo estudo de caso.

disposição a pagar; modelo RPL; serviços alimentadores de viagens; modelos econométricos

Alpizar, F. and Carlsson, F. (2003) Policy implications and analysis of the determinants of travel mode choice: an application of choice experiments to metropolitan Costa Rica. Environment and Development Economics, vol. 8, pp. 603-619.
Ben-Akiva, M., and Lerman, S. R. (1985) Discrete choice analysis: theory and applications to travel demand Cambridge: MIT Press.
Bhat, C. R. (1995) A heteroscedastic extreme value model of intercity travel mode choice. Transportation Research B, vol. 29, n. 6, pp. 471-483.
Bhat, C. R. (1997) Covariance heterogeneity in nested logit models: econometric structure and application to intercity travel. Transportation Research B, vol. 31, n. 1, pp. 11-21.
Bhat, C. R. (1998a) Analysis of travel mode and departure time choice for urban shopping trips. Transportation Research B, vol. 32, n. 6, pp. 361-371.
Bhat, C. R. (1998b) Accommodating variations in responsiveness to level-of-service measures in travel mode choice modeling. Transportation Research A, vol. 32, n. 7, pp. 495-507.
Carlsson, F. (2003) The demand for intercity public transport: the case of business passengers. Applied Economics, vol. 35, n. 1, pp. 41-50.
Chang, J. B., Moon, W. and Balasubramanian, S. K. (2012) Consumer valuation of health attributes for soy-based food: a choice modeling approach. Food Policy, vol. 37, Issue 3, pp. 335-342.
Chattopadhyay, C. (2000) The effectiveness of McFaddens's nested logit model in valuing amenity improvement. Regional Science and Urban Economics, vol. 30, n. 1, pp. 23-43.
Choi, A. S., Ritchie, B. W., Papandrea, F. and Bennett, J. (2010) Economic valuation of cultural heritage sites: a choice modeling approach. Tourism Management, vol. 31, n. 2, pp. 213-220.
Clarke, K. A. (2001) Testing nonnested models of international relations: reevaluating realism. American Journal of Political Science, vol. 45, n. 3, pp. 724-744.
Daganzo, C. (1979) Multinomial probit: the theory and its application to demand forecasting New York: Academic Press.
Das, S. S., and Maitra, B. (2007) A covariance heterogeneity nested logit model for choice of rural feeder service to bus stop. Indian Highways, IRC, vol. 35, n. 12, pp. 31-37.
Das, S. S., Maitra, B. and Boltze, M. (2009) Valuing travel attributes of rural feeder service to bus stop: a comparison of different logit model specifications. Journal of Transportation Engineering, vol. 135, n. 6, pp. 330-337.
Das, S. S., Ghosh, S., Maitra, B. and Boltze, M. (2012) Search strategy for nested logit tree structure: rural feeder service to bus stop: a case study. Working paper IIT Kharagpur
Green, P. E., Krieger, A. M., and Wind, Y. (2001) Thirty years of conjoint analysis: reflections and prospects. Interfaces, vol. 31, n. 3, pp. S56-S73.
Greene, W.H., Hensher, D.A. and Rose, J. (2006) Accounting for heterogeneity in the variance of unobserved effects in mixed logit models. Transportation Research Part B, vol. 40, n. 1, pp. 75-92.
Hensher, D.A. (1994) Stated preference analysis of travel choices: the state of practice. Transportation, vol. 21, n. 2, pp. 107-133.
Hensher, D. A. (2001a) The valuation of commuter travel time savings for car drivers in New Zealand: evaluating alternative model specifications. Transportation, vol. 28, n. 2, pp. 101-118.
Hensher, D. A. (2001b) Measurement of the valuation of travel time savings. Journal of Transport Economics and Policy, vol. 35, n. 1, pp. 71-98.
Hensher, D. A. (2006) Reducing sign violation for VTTS distributions through recognition of an individual's attribute processing strategy. Working Paper ITLS-WP-06-13. Institute of Transport and Logistics Studies, University of Sydney.
Hensher, D. A., and Greene, W. H. (2002) Specification and estimation of the Nested Logit model alternative normalization. Transportation Research Part B, vol. 36, n. 1, pp. 1 -17.
Hensher, D.A., and Greene, W.H., (2003) Mixed logit models: state of practice. Transportation, vol. 30, n. 2, pp. 133-176.
Hensher, D. A., and Sullivan, C. (2003) Willingness to pay for road curviness and road type. Transportation Research D, vol. 8, n. 2, pp. 139-155.
Hensher, D. A., Rose, J., and Greene, W. H. (2005) Applied choice analysis: a primer Cambridge University Press.
Hess S., Bierlaire. M., and Polak, J. W. (2005) Estimation of value of travel-time saving using mixed logit models. Transportation Research Part A, vol. 39, n. 2-3, pp. 221-236.
Hidrue, M. K., Parsons, G. R., Kempton, W, and Gardner, M. P. (2011) Willingness to pay for electric vehicles and their attributes. Resource and Energy Economics, vol. 33, n. 3, pp. 686-705
Jovicic, G., Hansen, C. O., (2003) A passenger travel demand model for Copenhagen. Transportation Research A, vol. 37, n. 4, pp. 333-349.
Kawata, Y. and Watanabe, M. (2012), Valuing the mortality risk of wildlife reintroduction: Heterogeneous risk preferences. Ecological Economics, vol. 76, pp. 79-86.
Koppelman, S. F. and Sethi, V. (2005) Incorporating variance and covariance heterogeneity in the Generalized Nested Logit model: an application to modeling long distance travel choice behavior. Transportation Research Part B, vol. 39, n. 9, pp. 825-853.
Lakshmana Rao, K.M., Jayasree, K., (2003) Rural infrastructure planning with emphasis on road network connectivity by coplanar concurrent theory. Proc. Map India Conference
Louviere, J. J., Hensher, D. A., and Swait. D. J. (2000) Stated choice methods. Analysis and applications Cambridge University Press, Cambridge, Mass.
Mallawaarachchi, T., Blamey R. K., Morrison, M. D., Johnson, A. K. L. and Bennett, J. W. (2001) Community values for environmental protection in a cane farming catchment in Northern Australia: a choice modeling study. Journal of Environmental Management, vol. 62, n. 3, pp. 301-316.
McFadden, D. (1974) Conditional logit analysis of qualitative choice behavior. In: Zarembka, P. (ed.) Frontiers in econometrics New York: Academic Press.
Mukhopadhyay, D., Sikdar, P. K., (2002) Strategic planning and programming of rural road network using HDM-4. Proc. Conference on Advances on Civil Engineering, I. I. T. Kharagpur, Kharagpur India.
Munizaga, M. A., Heydecker, B. G. and Ortuzar, J. D. (2000) Representation of heteroskedasticity in discrete choice models. Transportation Research Part B, vol. 34, n. 3, pp. 219-240.
NLOGIT 4.0 (2007) Reference Guide, Econometrics Software, Inc.
Phanikumar, C. V. and Maitra, B. (2007) Willingness to pay and preference heterogeneity for rural bus attributes. Journal of Transportation Engineering, vol. 133, n. 1, pp. 62-69.
Revelt, D. and Train, K. (1998) Mixed logit with repeated choices: households choices of appliance efficiency level. Review of Economics and Statistics, vol. 80, n. 4, pp. 647-657.
Ruud, P. (1996). Approximation and simulation of the multinomial probit model: an analysis of covariance matrix estimation. Working Paper, Department of Economics, University of California, Berkeley.
Train, K. (1998) Recreation demand models with taste differences over people. Land Economics, vol. 74, n. 2, pp. 230-239.
Train, K. (1999) Halton sequences for mixed logit. Working Paper, Department of Economics, University of California, Berkeley.
Ubillos, J. B., A. Ferna'ndez Sainz, A. (2004) The influence of quality and price on the demand for urban transport: The Case of University Students. Transportation Research Part A, vol. 38, n. 8, pp. 607-614.

Publication Dates

Publication in this collection
11 Oct 2013
Date of issue
Apr 2013

History

Received
11 July 2012
Accepted
17 July 2012

This work is licensed under a Creative Commons Attribution 4.0 International License.

[1] Alpizar, F. and Carlsson, F. (2003) Policy implications and analysis of the determinants of travel mode choice: an application of choice experiments to metropolitan Costa Rica. Environment and Development Economics, vol. 8, pp. 603-619.

[2] Ben-Akiva, M., and Lerman, S. R. (1985) Discrete choice analysis: theory and applications to travel demand Cambridge: MIT Press.

[3] Bhat, C. R. (1995) A heteroscedastic extreme value model of intercity travel mode choice. Transportation Research B, vol. 29, n. 6, pp. 471-483.

[4] Bhat, C. R. (1997) Covariance heterogeneity in nested logit models: econometric structure and application to intercity travel. Transportation Research B, vol. 31, n. 1, pp. 11-21.

[5] Bhat, C. R. (1998a) Analysis of travel mode and departure time choice for urban shopping trips. Transportation Research B, vol. 32, n. 6, pp. 361-371.

[6] Bhat, C. R. (1998b) Accommodating variations in responsiveness to level-of-service measures in travel mode choice modeling. Transportation Research A, vol. 32, n. 7, pp. 495-507.

[7] Carlsson, F. (2003) The demand for intercity public transport: the case of business passengers. Applied Economics, vol. 35, n. 1, pp. 41-50.

[8] Chang, J. B., Moon, W. and Balasubramanian, S. K. (2012) Consumer valuation of health attributes for soy-based food: a choice modeling approach. Food Policy, vol. 37, Issue 3, pp. 335-342.

[9] Chattopadhyay, C. (2000) The effectiveness of McFaddens's nested logit model in valuing amenity improvement. Regional Science and Urban Economics, vol. 30, n. 1, pp. 23-43.

[10] Choi, A. S., Ritchie, B. W., Papandrea, F. and Bennett, J. (2010) Economic valuation of cultural heritage sites: a choice modeling approach. Tourism Management, vol. 31, n. 2, pp. 213-220.

[11] Clarke, K. A. (2001) Testing nonnested models of international relations: reevaluating realism. American Journal of Political Science, vol. 45, n. 3, pp. 724-744.

[12] Daganzo, C. (1979) Multinomial probit: the theory and its application to demand forecasting New York: Academic Press.

[13] Das, S. S., and Maitra, B. (2007) A covariance heterogeneity nested logit model for choice of rural feeder service to bus stop. Indian Highways, IRC, vol. 35, n. 12, pp. 31-37.

[14] Das, S. S., Maitra, B. and Boltze, M. (2009) Valuing travel attributes of rural feeder service to bus stop: a comparison of different logit model specifications. Journal of Transportation Engineering, vol. 135, n. 6, pp. 330-337.

[15] Das, S. S., Ghosh, S., Maitra, B. and Boltze, M. (2012) Search strategy for nested logit tree structure: rural feeder service to bus stop: a case study. Working paper IIT Kharagpur

[16] Green, P. E., Krieger, A. M., and Wind, Y. (2001) Thirty years of conjoint analysis: reflections and prospects. Interfaces, vol. 31, n. 3, pp. S56-S73.

[17] Greene, W.H., Hensher, D.A. and Rose, J. (2006) Accounting for heterogeneity in the variance of unobserved effects in mixed logit models. Transportation Research Part B, vol. 40, n. 1, pp. 75-92.

[18] Hensher, D.A. (1994) Stated preference analysis of travel choices: the state of practice. Transportation, vol. 21, n. 2, pp. 107-133.

[19] Hensher, D. A. (2001a) The valuation of commuter travel time savings for car drivers in New Zealand: evaluating alternative model specifications. Transportation, vol. 28, n. 2, pp. 101-118.

[20] Hensher, D. A. (2001b) Measurement of the valuation of travel time savings. Journal of Transport Economics and Policy, vol. 35, n. 1, pp. 71-98.

[21] Hensher, D. A. (2006) Reducing sign violation for VTTS distributions through recognition of an individual's attribute processing strategy. Working Paper ITLS-WP-06-13. Institute of Transport and Logistics Studies, University of Sydney.

[22] Hensher, D. A., and Greene, W. H. (2002) Specification and estimation of the Nested Logit model alternative normalization. Transportation Research Part B, vol. 36, n. 1, pp. 1 -17.

[23] Hensher, D.A., and Greene, W.H., (2003) Mixed logit models: state of practice. Transportation, vol. 30, n. 2, pp. 133-176.

[24] Hensher, D. A., and Sullivan, C. (2003) Willingness to pay for road curviness and road type. Transportation Research D, vol. 8, n. 2, pp. 139-155.

[25] Hensher, D. A., Rose, J., and Greene, W. H. (2005) Applied choice analysis: a primer Cambridge University Press.

[26] Hess S., Bierlaire. M., and Polak, J. W. (2005) Estimation of value of travel-time saving using mixed logit models. Transportation Research Part A, vol. 39, n. 2-3, pp. 221-236.

[27] Hidrue, M. K., Parsons, G. R., Kempton, W, and Gardner, M. P. (2011) Willingness to pay for electric vehicles and their attributes. Resource and Energy Economics, vol. 33, n. 3, pp. 686-705

[28] Jovicic, G., Hansen, C. O., (2003) A passenger travel demand model for Copenhagen. Transportation Research A, vol. 37, n. 4, pp. 333-349.

[29] Kawata, Y. and Watanabe, M. (2012), Valuing the mortality risk of wildlife reintroduction: Heterogeneous risk preferences. Ecological Economics, vol. 76, pp. 79-86.

[30] Koppelman, S. F. and Sethi, V. (2005) Incorporating variance and covariance heterogeneity in the Generalized Nested Logit model: an application to modeling long distance travel choice behavior. Transportation Research Part B, vol. 39, n. 9, pp. 825-853.

[31] Lakshmana Rao, K.M., Jayasree, K., (2003) Rural infrastructure planning with emphasis on road network connectivity by coplanar concurrent theory. Proc. Map India Conference

[32] Louviere, J. J., Hensher, D. A., and Swait. D. J. (2000) Stated choice methods. Analysis and applications Cambridge University Press, Cambridge, Mass.

[33] Mallawaarachchi, T., Blamey R. K., Morrison, M. D., Johnson, A. K. L. and Bennett, J. W. (2001) Community values for environmental protection in a cane farming catchment in Northern Australia: a choice modeling study. Journal of Environmental Management, vol. 62, n. 3, pp. 301-316.

[34] McFadden, D. (1974) Conditional logit analysis of qualitative choice behavior. In: Zarembka, P. (ed.) Frontiers in econometrics New York: Academic Press.

[35] Mukhopadhyay, D., Sikdar, P. K., (2002) Strategic planning and programming of rural road network using HDM-4. Proc. Conference on Advances on Civil Engineering, I. I. T. Kharagpur, Kharagpur India.

[36] Munizaga, M. A., Heydecker, B. G. and Ortuzar, J. D. (2000) Representation of heteroskedasticity in discrete choice models. Transportation Research Part B, vol. 34, n. 3, pp. 219-240.

[37] NLOGIT 4.0 (2007) Reference Guide, Econometrics Software, Inc.

[38] Phanikumar, C. V. and Maitra, B. (2007) Willingness to pay and preference heterogeneity for rural bus attributes. Journal of Transportation Engineering, vol. 133, n. 1, pp. 62-69.

[39] Revelt, D. and Train, K. (1998) Mixed logit with repeated choices: households choices of appliance efficiency level. Review of Economics and Statistics, vol. 80, n. 4, pp. 647-657.

[40] Ruud, P. (1996). Approximation and simulation of the multinomial probit model: an analysis of covariance matrix estimation. Working Paper, Department of Economics, University of California, Berkeley.

[41] Train, K. (1998) Recreation demand models with taste differences over people. Land Economics, vol. 74, n. 2, pp. 230-239.

[42] Train, K. (1999) Halton sequences for mixed logit. Working Paper, Department of Economics, University of California, Berkeley.

[43] Ubillos, J. B., A. Ferna'ndez Sainz, A. (2004) The influence of quality and price on the demand for urban transport: The Case of University Students. Transportation Research Part A, vol. 38, n. 8, pp. 607-614.

Brasil

Brasil

Effect of model specification on valuation of travel attributes: a case study of rural feeder service to bus stop

Efeito da especificação do modelo na valoração dos atributos de viagem: estudo de caso dos serviços alimentadores de viagens rurais até pontos de ônibus

Abstracts

Publication Dates

History