Hybrid Choice Modeling Allowing for Reference-Dependent Preferences: Estimation and Validation for the Case of Alternative-Fuel Vehicles

The recent literature has shown an increasing interest in modelling behaviours that depart from the standard model of rational choice, as typically used in discrete choice models. While these behavioural aspects may be present at the same time in a choice context, most research has studied only one effect at a time. The risk in studying these behavioural aspects separately is that their effects can be confounded or overstated. In this paper the authors focus on two of the most popular behavioural extensions of the classical choice framework: preference heterogeneity related to attitudes and reference-dependent preferences. They investigate how the two phenomena interact in a combined framework and test their hybrid choice model that allows for reference-dependent preferences on a data set with choices among alternative-fuel vehicles. The models are validated using a large hold-out sample. The results show that both effects are important to explain heterogeneity in choice behaviour and that they are not confounded in the application. Latent variables and reference-dependent preferences appear to explain different dimensions of choice.

• Supplemental Notes:
  • This paper was sponsored by TRB committee ADC80 Alternative Transportation Fuels and Technologies.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Mabit, Stefan L
  • Cherchi, Elisabetta
  • Jensen, Anders F
  • Jordal-Jørgensen, Jørgen
• Conference:
  • Transportation Research Board 93rd Annual Meeting
  • Location: Washington DC
  • Date: 2014-1-12 to 2014-1-16
• Date: 2014

Language

• English

Media Info

• Media Type: Digital/other
• Features: References; Tables;
• Pagination: 16p
• Monograph Title: TRB 93rd Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Alternate fuels; Attitudes; Automobiles; Choice models; Consumer behavior; Consumer preferences; Decision making
• Subject Areas: Highways; Planning and Forecasting; Vehicles and Equipment; I72: Traffic and Transport Planning; I90: Vehicles;

Filing Info

• Accession Number: 01506667
• Record Type: Publication
• Report/Paper Numbers: 14-0705
• Files: TRIS, TRB, ATRI
• Created Date: Feb 7 2014 10:13AM