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Catching the tail: Empirical identification of the distribution of the value of travel time

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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 maximisation in the sense intended by the experimenter.

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  • Börjesson, Maria & Fosgerau, Mogens & Algers, Staffan, 2012. "Catching the tail: Empirical identification of the distribution of the value of travel time," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 378-391.
  • Handle: RePEc:eee:transa:v:46:y:2012:i:2:p:378-391 DOI: 10.1016/j.tra.2011.10.006
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    Citations

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    Cited by:

    1. 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, pages 289-301.
    2. Andrew Daly, 2013. "Forecasting behaviour: with applications to transport," Chapters,in: Choice Modelling, chapter 2, pages 48-72 Edward Elgar Publishing.
    3. Dekker, T. & Koster, P.R. & Brouwer, R., 2012. "Changing with the tide: Semi-parametric estimation of preference dynamics," Serie Research Memoranda 0005, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    4. Wiktor Budziński & Danny Campbell & Mikołaj Czajkowski & Urška Demšar & Nick Hanley, 2016. "Using geographically weighted choice models to account for spatial heterogeneity of preferences," Working Papers 2016-17, Faculty of Economic Sciences, University of Warsaw.
    5. repec:eee:transa:v:103:y:2017:i:c:p:311-326 is not listed on IDEAS
    6. Train, Kenneth, 2016. "Mixed logit with a flexible mixing distribution," Journal of choice modelling, Elsevier, pages 40-53.
    7. 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).
    8. Fosgerau, Mogens & Börjesson, Maria, 2015. "Manipulating a stated choice experiment," Journal of choice modelling, Elsevier, pages 43-49.
    9. 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).
    10. 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.
    11. 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, pages 661-676.
    12. 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.
    13. 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, pages 126-149.
    14. Fosgerau, Mogens & Börjesson, Maria, 2015. "Manipulating a stated choice experiment," Journal of choice modelling, Elsevier, pages 43-49.
    15. Caspar G. Chorus, 2014. "Capturing alternative decision rules in travel choice models: a critical discussion," Chapters,in: Handbook of Choice Modelling, chapter 13, pages 290-310 Edward Elgar Publishing.

    More about this item

    Keywords

    Value of time; Identification of distribution; Stated choice; Design; Validity test; Right tail;

    JEL classification:

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

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