Transportation mode choice: are latent factors important

Abstract

Many past researchers have invoked time, cost and specific mode attributes to explain transportation choice. Alternatively, this paper attempts to study a new dimension in individual's choice consideration by incorporating latent factors which can exert significant influence on individual's decision' The general structure comprises two models, namely the latent variable model and discrete choice model. The estimation is performed in two steps in order to determine the significance of four individual specific latent variables- safety, comfort, convenience and flexibility. These factors are postulated to be important for modal choice. In the second stage, the discrete choice model is estimated by integrating the choice and the latent ;variable in the choice process. The discrete choice model is estimated via logit and probit regressions. The main findings are that the latent factors appear statistically significant and thus enrich the discrete choice model. Hence latent factors must not be ignored and should be considered in determining individual preferences towards travel mode. By providing better explanation to mode choice behaviour, the enriched discrete choice model could prove useful to policy makers in managing transportation infrastructure and services to maximize welfare.