Valuing travel time variability within a rank-dependent utility framework and an investigation of unobserved taste heterogeneity

Attitude towards risk is important to individual decision making. Rank-dependent utility theory is an appealing framework within which to study decision making under risk. This paper specifies Rank-Dependent Utility (RDU) models in the context of a stated choice experiment of commuter's risky route choice to (a) estimate willingness to pay for travel time, and (b) understand the risk attitudes of sampled respondents and their socioeconomic characteristics. We also allow for unobserved taste heterogeneity within an RDU framework using a mixed multinomial logit model. The findings provide a new set of empirical estimates of the value of travel time savings that allow for travel time variability combined into a single measure, referred to as the value of expected travel time savings.