Transportation

, Volume 41, Issue 4, pp 745–763 | Cite as

Heterogeneity assumptions in the specification of bargaining models: a study of household level trade-offs between commuting time and salary

Article
First Online:

Abstract

With many real world decisions being made in conjunction with other decision makers, or single agent decisions having an influence on other members of the decision maker’s immediate entourage, there is strong interest in studying the relative weight assigned to different agents in such contexts. In the present paper, we focus on the case of one member of a two person household being asked to make choices affecting the travel time and salary of both members. We highlight the presence of significant heterogeneity across individuals not just in their underlying sensitivities, but also in the relative weight they assign to their partner, and show how this weight varies across attributes. This is in contrast to existing work which uses weights assigned to individual agents at the level of the overall utility rather than for individual attributes. We also show clear evidence of a risk of confounding between heterogeneity in marginal sensitivities and heterogeneity in the weights assigned to each member. We show how this can lead to misleading model results, and argue that this may also explain past results showing bargaining or weight parameters outside the usual [0,1] range in more traditional joint decision making contexts. In terms of substantive results, we find that male respondents place more weight on their partner’s travel time, while female respondents place more weight on their partner’s salary.

Keywords

Household decisions Distributional assumptions Random coefficients Joint decisions Bargaining coefficient 
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Notes

Acknowledgements

The authors are indebted to Danny Campbell for important contributions in the early stages of the work leading to this paper, and for his guidance to the first author during her PhD studies. The authors are also grateful to Staffan Algers for making the survey data available, and to Amanda Stathopoulos for translating the survey from Swedish—without their help, this work would not have been possible. The authors would also like to acknowledge the input of Nesha Beharry-Borg in early stages of this research. Earlier versions of this paper were presented at the European Transport Conference 2010 held in Glasgow and the Transportation Research Board (TRB) 91st Annual Meeting 2012 held in Washington, D.C. The authors are grateful for the comments received at these conferences, which provided insightful suggestions for revisions, as well as the comments of three anonymous referees received on an earlier version.

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Medical Research Council Biostatistics UnitInstitute of Public HealthCambridgeUK
  2. 2.Institute for Transport StudiesUniversity of LeedsLeedsUK

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