Experimental Evidence on Socioeconomic Differences in Risk-Taking and Risk Premiums

Using a route choice experiment with embedded travel time variability, this study empirically estimates car commuters’ risk attitudes and taste preferences within a nonlinear mixed logit model. In addition to the identified overall risk-taking behaviour, we find that risk attitudes covary with some sociodemographic characteristics, that is, older commuters are more risk-taking than young ones and higher-income commuters are less risk-taking than low-income ones. The implications of accounting for systematic risk attitude heterogeneity for valuing travellers’ willingness to pay for travel time improvement are also discussed.