Travel Demand Model with Heterogeneous Users and Endogenous Congestion: An application to optimal pricing of bus services
We formulate and estimate a structural model for travel demand, in which users have hetero- geneous preferences and make their transport decisions considering the network congestion. A key component in the model is that users have incomplete information about the preferences of other users in the network and they behave strategically when they make transportation decisions (mode and number of trips). Therefore, the congestion level is endogenously determinate in the equilibrium of the game played by users. For the estimation, we use the first order conditions of the users' utility maximization problem to derive the likelihood function and apply Bayesian methods for inference. Using data from Santiago, Chile, the estimated demand elasticities are consistent with results reported in the literature and the parameters confirm the effect of the congestion on the individuals' preferences. Finally, we compute optimal nonlinear prices for buses in Santiago, Chile. As a result, the nonlinear pricing schedule produces total benefits slightly greater than the linear pricing. Also, nonlinear pricing implies fewer individuals making trips by bus, but a higher number of trips per individual.
|Date of creation:||May 2010|
|Date of revision:||Apr 2011|
|Contact details of provider:|| Phone: (+33) 5 61 12 86 23|
Web page: http://www.tse-fr.eu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Armstrong, Mark, 1996. "Multiproduct Nonlinear Pricing," Econometrica, Econometric Society, vol. 64(1), pages 51-75, January.
- Hahn, Jong-Hee, 2003.
"Nonlinear pricing of telecommunications with call and network externalities,"
International Journal of Industrial Organization,
Elsevier, vol. 21(7), pages 949-967, September.
- Jong-Hee Hahn, 2000. "Nonlinear Pricing of Telecommunications with Call and Network Externalities," Keele Department of Economics Discussion Papers (1995-2001) 2000/15, Department of Economics, Keele University, revised Nov 2001.
- Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-61, May.
- Kijung Ahn, 2009. "Road Pricing and Bus Service Policies," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 43(1), pages 25-53, January.
- Kim, Jaehwan & Allenby, Greg M. & Rossi, Peter E., 2007. "Product attributes and models of multiple discreteness," Journal of Econometrics, Elsevier, vol. 138(1), pages 208-230, May.
- Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
- Joan L. Walker & Moshe Ben-Akiva & Denis Bolduc, 2007. "Identification of parameters in normal error component logit-mixture (NECLM) models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1095-1125.
- Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, June.
- Proost, Stef & Van Dender, Kurt, 2004.
"7. Marginal Social Cost Pricing For All Transport Modes And The Effects Of Modal Budget Constraints,"
Research in Transportation Economics,
Elsevier, vol. 9(1), pages 159-177, January.
- Stef Proost & Kurt Van Dender, 2003. "Marginal Social Cost Pricing for all Transport modes and the effects of modal budget constraints," Energy, Transport and Environment Working Papers Series ete0311, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
- Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2.
- Spiess, Heinz & Florian, Michael, 1989. "Optimal strategies: A new assignment model for transit networks," Transportation Research Part B: Methodological, Elsevier, vol. 23(2), pages 83-102, April.
- Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.
- Sundararajan, Arun, 2004. "Nonlinear pricing and type-dependent network effects," Economics Letters, Elsevier, vol. 83(1), pages 107-113, April.
When requesting a correction, please mention this item's handle: RePEc:tse:wpaper:24298. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.