, Volume 40, Issue 3, pp 505–523 | Cite as

Behavioural implications of preferences, risk attitudes and beliefs in modelling risky travel choice with travel time variability



The appropriate interpretation of a behavioural outcome requires allowing for risk attitude and belief of an individual, in addition to identification of preferences. This paper develops an Attribute-Specific Extended Rank-Dependent Utility Theory model to better understand choice behaviour in the presence of travel time variability, in which these three important components of choice are empirically addressed. This framework is more behaviourally appealing for travel time and travel time variability research than the traditional approach in which risk attitude and belief are overlooked. This model also reveals significant unobserved between-individual heterogeneity in preferences, risk attitudes and beliefs.


Traveller behaviour Stated choice Travel time variability Preference Risk attitude Belief 


  1. Allais, M.: Le comportement de l’homme rationnel devant le risque. Econometrica 21(4), 503–546 (1953)CrossRefGoogle Scholar
  2. Bates, J., Dix, M., May, T.: Travel time variability and its effect on time of day choice for the journey to work. In: Transportation Planning Methods, Proceedings of Seminar C held at the PTRC Summer Annual Meeting, vol. P290, pp. 293–311 (1987)Google Scholar
  3. Bates, J., Polak, J., Jones, P., Cook, A.: The valuation of reliability for personal travel. Transp. Res. E 37(2–3), 191–229 (2001)CrossRefGoogle Scholar
  4. Blanchard, O., Fischer, S.: Lectures on Macroeconomics. MIT Press, Cambridge (1989)Google Scholar
  5. Cherchi, E.: Modelling individual preferences, state of the art, recent advances and future directions. Paper presented at the12th International Conference on Travel Behaviour Research IATBR 2009, Jaipur, India (2009)Google Scholar
  6. Daly, A., Hess, S., Train, K.: Assuring finite moments for willingness to pay in random coefficient models. Transportation 39(1), 19–31 (2012)CrossRefGoogle Scholar
  7. Dickinson, D.L.: The effects of beliefs versus risk attitude on bargaining outcomes. Theor. Decis. 66(1), 69–101 (2009)CrossRefGoogle Scholar
  8. Diecidue, E., Wakker, P.P.: On the intuition of rank-dependent utility. J. Risk Uncertain. 23, 281–298 (2001)CrossRefGoogle Scholar
  9. Fox, C.R., See, K.E.: Belief and preference in decision under uncertainty. In: Hardman, D., Macchi, L. (eds.) Thinking: Psychological Perspectives on Reasoning, Judgment and Decision Making, pp. 273–314. Wiley, New York (2003)Google Scholar
  10. Hensher, D.A., Rose, J.M., Greene, W.M.: Applied Choice Analysis: A Primer. Cambridge University Press, Cambridge (2005)CrossRefGoogle Scholar
  11. Hensher, D.A., Greene, W.H., Li, Z.: Embedding risk attitude and decisions weights in non-linear logit to accommodate time variability in the value of expected travel time savings. Transp. Res. B 45(7), 954–972 (2011)CrossRefGoogle Scholar
  12. Hensher, D.A., Li, Z.: Valuing travel time variability within a rank-dependent utility framework and an investigation of unobserved taste heterogeneity. J. Transp. Econ. Policy 46(2), 293–312 (2012)Google Scholar
  13. Hollander, Y.: Direct versus indirect models for the effects of unreliability. Transp. Res. A 40(9), 699–711 (2006)Google Scholar
  14. Koster, P., Verhoef, E.T.: A rank dependent scheduling model. J. Transp. Econ. Policy 46(1), 123–138 (2012)Google Scholar
  15. Li, Z., Hensher, D.A., Rose, J.M.: Willingness to pay for travel time reliability in passenger transport: a review and some new empirical evidence. Transp. Res. E 46(3), 384–403 (2010)CrossRefGoogle Scholar
  16. Michea, A., Polak, J.: Modelling risky choice behaviour: evaluating alternatives to expected utility theory. Paper presented at the 11th International Conference on Travel Behaviour Research, Kyoto (2006)Google Scholar
  17. Noland, R.B., Small, K.A.: Travel-time uncertainty, departure time choice, and the cost of morning commutes. Transp. Res. Rec. 1493, 150–158 (1995)Google Scholar
  18. Noland, R.B., Polak, J.W.: Travel time variability: a review of theoretical and empirical issues. Transp. Rev. 22(1), 39–93 (2002)Google Scholar
  19. Quiggin, J.: A theory of anticipated utility. J. Econ. Behav. Organ. 3(4), 323–343 (1982)CrossRefGoogle Scholar
  20. Revelt, D., Train, K.: Mixed logit with repeated choices: households’ choices of appliance efficiency level. Rev. Econ. Stat. 80(4), 1–11 (1998)CrossRefGoogle Scholar
  21. Senna, L.A.D.S.: The influence of travel time variability on the value of time. Transportation 21(2), 203–228 (1994)CrossRefGoogle Scholar
  22. Small, K.A., Noland, R.B., Chu, X., Lewis, D.: Valuation of travel-time savings and predictability in congested conditions for highway user-cost estimation. NCHRP Report 431, Transportation Research Board, National Research Council (1999)Google Scholar
  23. Sillano, M., de Ortúzar, J.D.: Willingness-to-pay estimation with mixed logit models: some new evidence. Environ. Plan. A 37(3), 525–550 (2005)CrossRefGoogle Scholar
  24. Tversky, A., Kahneman, D.: Advances in prospect theory: cumulative representations of uncertainty. J. Risk Uncertain. 5(4), 297–323 (1992)CrossRefGoogle Scholar
  25. Wakker, P.P.: On the composition of risk preference and belief. Psychol. Rev. 111(1), 236–241 (2004)CrossRefGoogle Scholar
  26. Wakker, P.P.: Explaining the Characteristics of the Power (CRRA) utility family. Health Econ. 17(12), 1329–1344 (2008)CrossRefGoogle Scholar
  27. Wu, G., Gonzalez, R.: Nonlinear decision weights in choice under uncertainty. Manag. Sci. 45(1), 74–86 (1999)CrossRefGoogle Scholar
  28. Yaari, M.E.: The dual theory of choice under risk. Econometrica 55(1), 95–115 (1987)CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.Institute of Transport and Logistics Studies, The Business SchoolThe University of SydneySydneyAustralia

Personalised recommendations