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Travel mode choices in a greening market: the impact of electric vehicles and prior investments

Jeremy van Dijk (), Mehdi Farsi and Sylvain Weber ()

No 20-04, IRENE Working Papers from IRENE Institute of Economic Research

Abstract: Through a choice experiment conducted among 995 Swiss respondents, we study the linkages between prior investment decisions and the choice of travel mode. Our experiment design and empirical framework aims to identify the impact of electric vehicles (EVs) and to test for two behavioural deviations from the rationally optimal usage. Prior investment in a car or public transport pass could be used ex-ante as a commitment device for overcoming self-control issues, or could affect mode choices ex-post through regret effects of sunk costs. We find no evidence to support the sunk cost hypothesis, but our findings provide partial evidence in favour of commitment mechanisms. A prior investment decision decreases the consumer’s responsiveness to variation of travel time. However, such commitments do not seem to influence responses to changes in marginal travel cost. Further, we find that EV adoption does not result in a significant step-change in usage patterns above rational marginal cost reactions. Our results thus reinforce the importance of financial incentives in policies aiming at a behavioural change in travel mode choices.

Keywords: Transport; Behaviour; Choice experiment; Commitment; Sunk cost; Electric vehicles; Environmental policy. (search for similar items in EconPapers)
JEL-codes: C25 C91 D01 D90 O33 Q40 Q55 (search for similar items in EconPapers)
Pages: 29 pages.
Date: 2020-04
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-gen, nep-reg, nep-tre and nep-ure
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