Understanding the structure of preference heterogeneity in public transport and air travel using structural choice modelling

Abstract

Explaining and predicting the choices of consumers is perhaps the most enduring research problem faced by the behavioural sciences. Of the range of methods used to gather information about consumers preferences, choice based approaches are common place in both academia and industry. For the most part, consumers preferences from this type of data are typically evaluated assuming preferences for the attributes of alternatives in choice are independent as a necessity due to the limitations of the statistical model. Recent advances in choice modelling however present an opportunity to consider that there may be a latent structure to decision makers' taste sensitivities (preference parameters) and further, behavioural decision theory may be useful in helping the researcher specify that structure. This thesis documents three applications of structural choice modelling that both test behavioural decision theory as well as contribute new interpretations about how behavioural decision theory may manifest as structures within the latent dimensions of consumers utility function.Each application considers the structure of the taste variation (preference heterogeneity) in decision makers' taste sensitivities towards the attributes of transport services. In each case, behavioural decision theory is drawn upon to first predict what structures might be expected, and subsequently structural choice models are specified to represent theory. This unique modelling approach allows the following types of research questions to be addressed:• How does the nature of the choice environment affect the taste sensitivities in decision makers' preferences for particular product/service attributes?• Are latent sources of variation in consumers taste sensitivities stable or dynamic?iii iv Abstract • What are the drivers of commonalities between the decision makers' taste sensitivities for the attributes of alternatives in choice?• Is there a relationship between the way consumers think about their priorities and the way consumers make choices?These questions are explored using so-called structural choice models. Structural choice models are type of factor-analytic choice model (a very general form of mixed logit). The model allows for a parsimonious representation of the ways in which consumers vary in their tastes and preferences. Representing the unobserved sources of taste variation as latent variables and specifying a structure to the latent variables offer great flexibility, including data from the same consumers from different choice tasks. This allows the researcher, for example, to specify latent variables general to several data generation processes and others unique to one particular process. Thus, the extent to which attributes under different scenarios are indeed treated by decision makers' as the same can be assessed. From a policy perspective, the design of more nuanced policy responses may be possible given the insight into the structure of the heterogeneity in decision makers' preferences. The thesis is presented in the following...

Separating generalizable from source-specific preference heterogeneity in the fusion of revealed and stated preferences

“…can be explored targeting convergence on common sources and partitioning unique elements of specific designs. Finally, different preference elicitation methods might be studied, for example, SP choice experiments and best-worst tasks (Magor 2018). Again, the key question is the extent to which the different methods converge on a shared behavioral process underlying the dgp's.…”