Incorporating pro-environmental preferences towards green automobile technologies through a Bayesian hybrid choice model

RA Daziano, D Bolduc - Transportmetrica A: Transport Science, 2013 - Taylor & Francis
RA Daziano, D Bolduc
Transportmetrica A: Transport Science, 2013Taylor & Francis
In this article we develop, implement and apply a Markov chain Monte Carlo (MCMC) Gibbs
sampler for Bayesian estimation of a hybrid choice model (HCM), using stated data on both
vehicle purchase decisions and environmental concerns. Our study has two main
contributions. The first is the feasibility of the Bayesian estimator we derive. Whereas
classical estimation of HCMs is fairly complex, we show that the Bayesian approach for
HCMs is methodologically easier to implement than simulated maximum likelihood because …
In this article we develop, implement and apply a Markov chain Monte Carlo (MCMC) Gibbs sampler for Bayesian estimation of a hybrid choice model (HCM), using stated data on both vehicle purchase decisions and environmental concerns. Our study has two main contributions. The first is the feasibility of the Bayesian estimator we derive. Whereas classical estimation of HCMs is fairly complex, we show that the Bayesian approach for HCMs is methodologically easier to implement than simulated maximum likelihood because the inclusion of latent variables translates into adding independent ordinary regressions; we also find that, using the Bayesian estimates, forecasting and deriving confidence intervals for willingness to pay measures is straightforward. The second is the capacity of HCMs to adapt to practical situations. Our empirical results coincide with a priori expectations, namely that environmentally-conscious consumers are willing to pay more for low-emission vehicles. The model outperforms standard discrete choice models because it not only incorporates pro-environmental preferences but also provides tools to build a profile of environmentally-conscious consumers.
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