Willingness-to-Pay and Preference Heterogeneity for Rural Bus Attributes

Abstract

This paper presents estimations of willingness-to-pay (WTP) values in the context of rural bus service in a developing country. Using stated choice data collected from rural bus users, WTP values are estimated by developing standard multinomial logit model (MNL) and three different random parameter logit (RPL) models: One with independent or uncorrelated responses, another taking into account the correlations among responses, and the other allowing heterogeneity around the mean of in-vehicle travel time. While developing the RPL models, successful application of the sparsely used constrained triangular distribution is demonstrated. WTP values are estimated separately for commuting and noncommuting trips. Higher WTP values for travel time are observed for commuting trips, while for noncommuting trips higher WTP values are found for qualitative attribute. Preference heterogeneity associated with the mean is investigated, and the “travel distance” is found to have a statistically significant decomposition effect on the mean of in-vehicle travel time for commuting trips. The traditional MNL model, in general, is found to underestimate the WTP values as compared to RPL models.