Unobserved and observed heterogeneity in risk attitudes: Implications for valuing travel time savings and travel time variability

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Abstract

In this paper, we incorporate the attitude towards risk into a scheduling model to account for travel time variability, using a choice experiment of car commuters choosing from risky alternatives. The parameters that represent unobserved and observed heterogeneity in risk attitudes are jointly estimated within a non-linear utility framework. The model outputs are compared with the results from the model under the assumption of risk attitude homogeneity and we find differences in the willingness to pay for time savings and reduced travel time variability. These findings illustrate that risk attitude heterogeneity plays a role in choice behaviour.

Original languageEnglish
Pages (from-to)12-18
Number of pages7
JournalTransportation Research Part E: Logistics and Transportation Review
Volume112
DOIs
StatePublished - Apr 2018
Externally publishedYes

Keywords

  • Expected utility theory
  • Observed heterogeneity
  • Risk attitude
  • Travel time variability
  • Unobserved heterogeneity
  • Willingness to pay

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