Fosgerau, Mogens (2007): Using nonparametrics to specify a model to measure the value of travel time. Published in: Transportation Research Part A , Vol. 41, No. 9 (2008): pp. 842-856.
Download (187kB) | Preview
Using a range of nonparametric methods, the paper examines the specification of a model to evaluate the willingness-to-pay (WTP) for travel time changes from binomial choice data from a simple time-cost trading experiment. The analysis favours a model with random WTP as the only source of randomness over a model with fixed WTP which is linear in time and cost and has an additive random error term. Results further indicate that the distribution of log WTP can be described as a sum of a linear index fixing the location of the log WTP distribution and an independent random variable representing unobserved heterogeneity. This formulation is useful for parametric modelling. The index indicates that the WTP varies systematically with income and other individual characteristics. The WTP varies also with the time difference presented in the experiment which is in contradiction of standard utility theory.
|Item Type:||MPRA Paper|
|Original Title:||Using nonparametrics to specify a model to measure the value of travel time|
|Keywords:||Willingness-to-pay; WTP; value of time; nonparametric; semiparametric; local logit|
|Subjects:||C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C25 - Discrete Regression and Qualitative Choice Models ; Discrete Regressors ; Proportions ; Probabilities
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R41 - Transportation: Demand, Supply, and Congestion ; Travel Time ; Safety and Accidents ; Transportation Noise
|Depositing User:||Mogens Fosgerau|
|Date Deposited:||08. Dec 2008 09:30|
|Last Modified:||01. May 2015 10:43|
Bateman, I., Munro, A., Rhodes, B., Starmer, C. and Sugden, R. (1997) A Test of the Theory of Reference-Dependent Preferences. The Quarterly Journal of Economics 112(2), 479–505.
Bates, J. and Whelan, G. (2001) Size and sign of Time Savings. ITS Working Paper (561).
Becker, S. G. (1965) A theory of the allocation of time. Economic Journal 75(299), 493–517.
De Borger, B. and Fosgerau, M. (2006) Another test of the theory of reference-dependent preferences: the trade-off between money and time.
Burge, P. and Rohr, C. (2004) DATIV: SP Design: Proposed approach for pilot survey Tetra-Plan in cooperation with RAND Europe and Gallup A/S.
Burge, P., Rohr, C., Vuk, G. and Bates, J. (2004) Review of international experience in VOT study design.
Cameron, T. A. and James, M. D. (1987) Efficient Estimation Methods for ”Closed-Ended” Contingent Valuation Surveys. Review of Economics and Statistics 69(2), 269–276.
Cantillo, V., Heydecker, B. and de Dios Ortuzar, J. (2006) A discrete choice model incorporating thresholds for perception in attribute values. Transportation Research Part B: Methodological 40(9), 807–825.
DeSerpa, A. C. (1971) A Theory of the Economics of Time. The Economic Journal 81, 828–845.
Doornik, J. A. (2001) Ox: An Object-Oriented Matrix Language. Timberlake Consultants Press London.
Fan, J., Heckman, N. E. and Wand, M. P. (1995) Local Polynomial Regression for Generalized Linear Models and Quasi-Likelihood functions. Journal of the American Statistical Association 90(420), 141–150.
Fosgerau, M. (2005) Unit income elasticity of the value of travel time savings.
Fosgerau, M. (2006) Investigating the distribution of the value of travel time savings. Transportation Research Part B: Methodological 40(8), 688–707.
Fosgerau, M. and Bierlaire, M. (2006) A practical test for the choice of mixing distribution in discrete choice models Transportation Research Part B: Methodological Forthcoming.
Gunn, H. (2000) An Introduction to the Valuation of Travel-Time Savings and Losses Handbook of Transport Modelling Elsevier Science Ltd. chapter 26.
Hensher, D. (2001) Measurement of the Valuation of Travel Time Savings. Journal of Transport Economics and Policy 35(1), 71–98.
Horowitz, J. (1993) Semiparametric estimation of a work trip mode choice model. Journal of Econometrics 58, 49–70.
Horowitz, J. (1998) Semiparametric Methods in Econometrics. Lecture Notes in Statistics Springer New York.
Härdle, W. (1990) Applied Nonparametric Regression. Vol. 19 of Econometric Society Monograph Series Cambridge University Press.
Hultkrantz, L. and Mortazavi, R. (2001) Anomalies in the Value of Travel-Time Changes. Journal of Transport Economics and Policy 35(2), 285–300.
Jara-Diaz, S. R. (2000) Allocation and valuation of travel time savings. in D. Hensher and K. Button (eds), Handbooks in Transport, Vol. 1: Transport Modelling Pergamon Press Oxford pp. 303–319.
Johnson, M. B. (1966) Travel Time and the Price of Leisure. Western Economic Journal 4, 135–145.
Kahneman, D. and Tversky, A. (1979) Prospect Theory: An Analysis of Decision under Risk. Econometrica 47(2), 263–292.
Klein, R. W. and Spady, R. H. (1993) An Efficient Semiparametric Estimator for Binary Response Models. Econometrica 61(2), 387–421.
Mackie, P. J., Jara-Diaz, S. R. and Fowkes, A. S. (2001) The value of travel time savings in evaluation. Transportation Research Part E: Logistics and Transportation Review 37(2-3), 91–106.
McConnell, K. E. (1990) Models for referendum data: The structure of discrete choice models for contingent valuation. Journal of Environmental Economics and Management 18(1), 19–34.
McFadden, D. (1998) Measuring Willingness-To-Pay for Transportation Improvements. in T. G¨arling, T. Laitila and K. Westin (eds), Theoretical Foundations of Travel Choice Modeling 1 edn Pergamon Oxford chapter 15, pp. 339–364.
McFadden, D. and Train, K. (2000) Mixed MNL Models for discrete response. Journal of Applied Econometrics 15, 447–470.
Oort, O. (1969) The evaluation of travelling time. Journal of Transport Economics and Policy 3, 279–286.
Pagan, A. and Ullah, A. (1999) Nonparametric Econometrics. Cambridge University Press.
Train, K. and Weeks, M. (2004) Discrete Choice Models in Preference Space and Willingness-to-Pay Space. in A. Alberini and R. Scarpa (eds), Applications of Simulation Methods in Environmental Resource Economics Kluwer Academic Publishers.
Tversky, A. and Kahneman, D. (1991) Loss Aversion in Riskless Choice: A Reference-Dependent Model. The Quarterly Journal of Economics 106(4), 1039–1061.
Welch, M. and Williams, H. (1997) The sensitivity of Transport Investments Benefits to the Evaluation of Small Travel-Time Savings. Journal of Transport Economics and Policy XXXI(3), 231–254.
Yatchew, A. (2003) Semiparametric Regression for the Applied Econometrician. Themes in modern econometrics Cambridge University Press.
Zheng, J. X. (1996) A consistent test of functional form via nonparametric estimation techniques. Journal of Econometrics 75(2), 263–289.