Assessment of urban transportation pricing policies with incorporation of unobserved heterogeneity

Hamid R. Fowri and Seyedehsan Seyedabrishami

Transport Policy, 2020, vol. 99, issue C, 12-19

Abstract: This paper aims to assess five urban transportation pricing policies (including petrol price, parking fee, taxi fare, bus fare, and metro fare). Using stated preference panel data, we estimate a mixed logit (ML) model and a latent class (LC) model, which account for individual unobserved heterogeneity. The estimated policy implications resulting from these models are compared to get a deeper understanding of the differences in policy recommendations when using different treatments of unobserved heterogeneity. In this regard, we focus on two criteria, which are the changes in mode share and the changes in expected consumer surplus in response to the changes in the level of pricing policies. Results by both ML and LC models reveal that in some comparisons, the ML and LC models yield similar results, as both indicate the policy of increasing petrol price is more effective than increasing parking fee on reducing car congestion. However, we can also find some differences in the behavioral outcomes of these models. Overall, the ML model estimated substantially greater choice elasticities and changes in mode share, in comparison to the LC model. Some of these differences may lead to different policy recommendations as the ML model suggests avoiding the policy of increasing bus fare due to its large negative impact on car share, while the LC model predicts a relatively small reduction in car share after increasing bus fare and therefore, can motivate policymakers toward this policy.

Keywords: Pricing policy; Mode choice; Consumer surplus; Policy implications; Latent class model; Stated preference (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0967070X19309503
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:99:y:2020:i:c:p:12-19

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tranpol.2020.08.008

Access Statistics for this article

Transport Policy is currently edited by Y. Hayashi

More articles in Transport Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().