Time and income constraints in discrete choice models with an application to mode choice

Jonas Eliasson ()

MPRA Paper from University Library of Munich, Germany

Abstract: We discuss how differences in disposable time and money should be incorporated in discrete choice models. Starting from a general framework, we test several indirect utility functions in an application on mode choice, using data from the recent Swedish national travel survey. Incorporating differences in available income and time improves goodness-of-fit significantly. It also affects the forecasts obtained from the model. Both average elasticities and the implied average values of time depend not only on whether time and income enter the model, but also on the way this is done. The best results in terms of goodness-of-fit are obtained from a Taylor expansion of a Box-Cox function. We show that it is possible to make the Taylor expansion around different points, and that the choice of expansion point will affect both the goodness-of-fit, the average value of time and the elasticities of the model.

Keywords: Time constraints; budget constraints; discrete choice; value of travel time (search for similar items in EconPapers)
JEL-codes: R41 (search for similar items in EconPapers)
Date: 2000-11
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