Microeconomic theory and generalised cost

Bruzelius, Nils

doi:10.1007/bf00148460

Cited by 19 publications

(13 citation statements)

References 6 publications

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“…Bruzelius (1981) queried whether we had ''really shown that such models work?'' We have shown that they do not work.…”

Section: Discussionmentioning

confidence: 99%

“…It is important to know whether GC is empirically valid because of the fact that GC is consistent with conventional microeconomic demand theory if and only if the willingness to pay to save travel time is not a function of real income (Bruzelius 1981). In addition to insights of a methodological nature, we also provide a range of results that are of broader interest for the purposes of forecasting, benchmarking and interpretation in the passenger rail market.…”

Section: Scope and Significancementioning

confidence: 98%

“…This then supports modelling opportunities not otherwise possible which we here exploit to test a number of important hypotheses. As Bruzelius (1981), summarising Searle (1978), concluded: ''the use of generalised cost has to be based on [the claim that] travel demand functions in terms of generalised costs seem to be working better than other types of travel demand models''. Specifically, the aims of the research reported here are to test:…”

Section: The Opportunity and Aimsmentioning

confidence: 99%

“…This paper not only raises the question of whether the use of GC in demand models is justified but provides some empirically based answers. Bruzelius (1981) contends that the ''articles (Grey 1978a, b;Goodwin 1978;Searle 1978) demonstrate that there is a considerable lack of understanding in the profession''. We contend that this is still the case with regard to GC.…”

Section: Introductionmentioning

confidence: 99%

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Is generalised cost justified in travel demand analysis?

Wardman

Toner

2018

Transportation

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Generalised cost (GC) has long been widely used as a measure of the attractiveness of travel alternatives. We argue that its limitations have been forgotten, overlooked or not appreciated, and it is used because 'it has always been used'. We explore the relationships between GC and its components (price, time, value of time) and their respective demand elasticities and show that the variation of component elasticities over time and space is not consistent with the variation implied by a GC formulation. We therefore conduct detailed tests of whether the GC approach is justified. The datasets used are recorded ticket sales between pairs of railway stations for a number of years and covering a variety of types of flow. When restricted to a GC formulation, we find that allowing VoT to be estimated as part of the modelling process is greatly superior to using either the UK official VoTs or using VoTs from meta-analyses. We conclude that the importance of using the correct VoT in calculating GC cannot be overstated. Failure to do so will lead to incorrect derivation of component elasticities from the GC elasticity. A more flexible approach estimating elasticities to components of GC is better than even the best GC formulation. We conclude that robust models, with large sample sizes and very precise coefficient estimates in their standard form, are not able to support the variation in GJT and fare elasticities that would be implied by the GC approach. It might be time to stop using GC.

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“…Bruzelius (1981) queried whether we had ''really shown that such models work?'' We have shown that they do not work.…”

Section: Discussionmentioning

confidence: 99%

Section: Scope and Significancementioning

confidence: 98%

Section: The Opportunity and Aimsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Is generalised cost justified in travel demand analysis?

Wardman

Toner

2018

Transportation

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“…However, this does not take into account the physical network structure of transport modes or their different financial overheads, speeds, frequencies, levels of effort required in their use, interchange times and capacities [37,38]. Therefore, in this work the cost of travel is expressed as a generalized cost, taking into account both time and monetary components of any journey along the transport network in one unified value [39,40]. This makes the assumption that the cost of travel between an origin and destination can be generally expressed in the form:…”

Section: Measuring Transport Costs and Accessibilitymentioning

confidence: 99%

Transport Accessibility Analysis Using GIS: Assessing Sustainable Transport in London

Ford

Barr

Dawson

et al. 2015

IJGI

148

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Transport accessibility is an important driver of urban growth and key to the sustainable development of cities. This paper presents a simple GIS-based tool developed to allow the rapid analysis of accessibility by different transport modes. Designed to be flexible and use publicly-available data, this tool (built in ArcGIS) uses generalized cost to measure transport costs across networks including monetary and distance components. The utility of the tool is demonstrated on London, UK, showing the differing patterns of accessibility across the city by different modes. It is shown that these patterns can be examined spatially, by accessibility to particular destinations (e.g., employment locations), or as a global measure across a whole city system. A number of future infrastructure scenarios are tested, examining the potential for increasing the use of low-carbon forms of transport. It is shown that private car journeys are still the least cost mode choice in London, but that infrastructure investments can play a part in reducing the cost of more sustainable transport options.

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Investigating demand models with more flexible elasticity functions: empirical insights from rail demand analysis

Wardman

2024

Transportation

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Models of rail travel demand take one of three generic functional forms: the generalised cost (GC) function where price and the various time variables are combined into a composite term through the use of appropriate values of time; the generalised journey time and fare (GJT-Fare) approach, where the time-related variables are combined into a single term and fare remains separate; and the specification of separate elasticities for all terms, termed the separate components (SC) approach. This research extends that reported by Wardman and Toner (Transportation 47:75–108, 10.1007/s11116-017-9850-7, 2020) in exploring more flexible functional forms where appropriate parameterisation of the standard GC, GJT and SC models allows them to have more general elasticity properties. Whilst the aforementioned study discounted the standard GC approach on the grounds of inferior fit and undesirable elasticity properties, the analysis reported here, based on large datasets, finds best-fitting more flexible models to have elasticity properties that resemble those of the GC approach. Indeed, the preferred functions can deliver elasticities that are somewhat different from those of the GJT-Fare approach that has long provided the basis of official rail demand forecasts in Great Britain. In addition, the study adds to the existing evidence base by providing credible and precise elasticities for GJT and fare, and importantly for the rarely estimated GC and SC elasticities, reaffirms the need of GC models to directly estimate demand consistent values of time, and indicates that the weights currently attached to headway and interchange in formulating GJT are in need of significant amendment. Although the context is rail in Great Britain, the results have relevance to demand analysis of other modes and in other countries as well as to other transport modelling approaches.

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Microeconomic theory and generalised cost

Cited by 19 publications

References 6 publications

Is generalised cost justified in travel demand analysis?

Is generalised cost justified in travel demand analysis?

Transport Accessibility Analysis Using GIS: Assessing Sustainable Transport in London

Investigating demand models with more flexible elasticity functions: empirical insights from rail demand analysis

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