The impact of a congestion charging exemption on the demand for new low‐emission vehicles

Numerous initiatives have been employed around the world in order to address rising greenhouse gas (GHG) emissions originating from the transport sector. These measures include: travel demand management (congestion‐charging), increased fuel taxes, alternative fuel subsidies and low‐emission vehicle (LEV) rebates. Incentivizing the purchase of LEVs has been one of the more prevalent approaches in attempting to tackle this global issue. LEVs, whilst having the advantage of lower emissions and, in some cases, more efficient fuel consumption, also bring the downsides of increased purchase cost, reduced convenience of vehicle fuelling, and operational uncertainty. To stimulate demand in the face of these challenges, various incentive‐based policies, such as toll exemptions, have been used by national and local governments to encourage the purchase of these types of vehicles. In order to address rising GHG emissions in Stockholm, and in line with the Swedish Government’s ambition to operate a fossil free fleet by 2030, a number of policies were implemented targeting the transport sector. Foremost amongst these was the combination of a congestion charge – initiated to discourage emissions‐intensive travel – and an exemption from this charge for some LEVs, established to encourage a transition towards a ‘green’ vehicle fleet. Although both policies shared the aim of reducing GHG emissions, the exemption for LEVs carried the risk of diminishing the effectiveness of the congestion charging scheme. As the number of vehicle owners choosing to transition to an eligible LEV increased, the congestion‐reduction effectiveness of the charging scheme weakened. In fact, policy makers quickly recognized this potential issue and consequently phased out the LEV exemption less than 18 months after its introduction (1). Several studies have investigated the demand for LEVs through stated‐preference (SP) surveys across multiple countries, including: Denmark (2), Germany (3, 4), UK (5), Canada (6), USA (7, 8) and Australia (9). Although each of these studies differed in approach, all involved SP surveys where differing characteristics between various types of vehicles, including LEVs, were presented to respondents and these respondents in turn made hypothetical decisions about which vehicle they would be most likely to purchase. Although these studies revealed a number of interesting findings in regards to the potential demand for LEVs, they relied on SP data. In contrast, this paper employs an approach where LEV choice is modelled by taking a retrospective view and by using revealed preference (RP) data. By examining the revealed preferences of vehicle owners in Stockholm, this study overcomes one of the principal limitations of SP data, namely that stated preferences may not in fact reflect individuals’ actual choices, such as when cost, time, and inconvenience factors are real rather than hypothetical. This paper’s RP approach involves modelling the characteristics of individuals who purchased new LEVs, whilst estimating the effect of the congestion charging exemption upon choice probabilities and subsequent aggregate demand. The paper contributes to the current literature by examining the effectiveness of a toll exemption under revealed preference conditions, and by assessing the total effect of the policy based on key indicators for policy makers, including: vehicle owner home location, commuting patterns, number of children, age, gender and income. Extended Abstract Submission for Kuhmo Nectar Conference 2014 2 The two main research questions motivating this study were:  Which individuals chose to purchase a new LEV in Stockholm in 2008?; and,  How did the congestion charging exemption affect the aggregate demand for new LEVs in Stockholm in 2008? In order to answer these research questions the analysis was split into two stages. Firstly, a multinomial logit (MNL) model was used to identify which demographic characteristics were most significantly related to the purchase of an LEV over a conventional vehicle. The three most significant variables were found to be: intra‐cordon residency (positive); commuting across the cordon (positive); and distance of residence from the cordon (negative). In order to estimate the effect of the exemption policy on vehicle purchase choice, the model included variables to control for geographic differences in preferences, based on the location of the vehicle owners’ homes and workplaces in relation to the congestion‐charging cordon boundary. These variables included one indicator representing commutes across the cordon and another indicator representing intra‐cordon residency. The effect of the exemption policy on the probability of purchasing LEVs was estimated in the second stage of the analysis by focusing on the groups of vehicle owners that were most likely to have been affected by the policy i.e. those commuting across the cordon boundary (in both directions). Given the inclusion of the indicator variable representing commutes across the cordon, it is assumed that the estimated coefficient of this variable captures the effect of the exemption policy on the utility of choosing to purchase an exempt LEV for these two groups of vehicle owners. The intra‐cordon residency indicator variable also controls for differences between the two groups, based upon direction of travel across the cordon boundary. A counter‐hypothesis to this assumption is that the coefficient of the variable representing commuting across the cordon boundary instead only captures geo‐demographic differences that lead to variations in LEV ownership across the different groups of vehicle owners in relation to the cordon boundary. In order to address this counter‐hypothesis, an additional analysis was performed on data from a city with a similar geodemographic pattern to Stockholm, Gothenburg ‐ Sweden’s second largest city. The results of this analysis provided evidence to support the argument that the coefficient of the variable representing commutes across the cordon was capturing the effect of the exemption policy. Based upon this framework, the predicted vehicle type shares were calculated using the estimated coefficients of the MNL model and compared with predicted vehicle type shares from a simulated scenario where the exemption policy was inactive. This simulated scenario was constructed by setting the coefficient for the variable representing commutes across the cordon boundary to zero for all observations to remove the utility benefit of the exemption policy. Overall, the procedure of this second stage of the analysis led to results showing that the exemption had a substantial effect upon the probability of purchasing and aggregate demand for exempt LEVs in Stockholm during 2008. By making use of unique evidence of revealed preferences of LEV owners, this study identifies the common characteristics of new LEV owners and estimates the effect of Stockholm's congestion charging exemption upon the demand for new LEVs during 2008. It was found that the variables that had the greatest effect upon the choice of purchasing an exempt LEV included intra‐cordon residency (positive), distance of home from the cordon (negative), and commuting across the cordon (positive). It was also determined that owners under the age of 30 years preferred non‐exempt LEVs (low CO2 LEVs), whilst those over the age of 30 years preferred electric vehicles. In terms of electric vehicles, it was apparent that those individuals living within the city had the highest propensity towards purchasing this vehicle type. A negative relationship between choosing an electric vehicle and the distance of an individuals’ residency from the cordon was also evident. Overall, the congestion charging exemption was found to have increased the share of exempt LEVs in Stockholm by 1.9%, with, as expected, a much stronger effect on those commuting across the boundary, with those living inside the cordon having a 13.1% increase, and those owners living outside the cordon having a 5.0% increase. This increase in demand corresponded to an additional 538 (+/‐ 93; 95% C.I.) new exempt LEVs purchased in Stockholm during 2008 (out of a total of 5 427; 9.9%). Policy makers can take note that an incentive‐based policy can increase the demand for LEVs and appears to be an appropriate approach to adopt when attempting to reduce transport emissions through encouraging a transition towards a ‘green’ vehicle fleet.

Quantifying economic values of coastal and marine ecosystem services and assessing their use in decision-making : applications in New Caledonia and Australia

This thesis deals with the issues of quantifying economic values of coastal and marine ecosystem services and assessing their use in decision-making. The first analytical part of the thesis focuses on estimating non-market use and non-use values, with an application in New-Caledonia using Discrete Choice Experiment. The second part examines how and to what extent the economic valuation of ecosystem services is used in coastal management decision-making with an application in Australia. Using a multi-criteria analysis, the relative importance of ecological, social and economic evaluation criteria is also assessed in the context of coastal development.

Understanding public response to a congestion charge : a random-effects ordered logit approach

Public acceptance is consistently listed as having an enormous impact on the implementation and success of a congestion charge scheme. This paper investigates public acceptance of such a scheme in Australia. Surveys were conducted in Brisbane and Melbourne, the two fastest growing Australian cities. Using an ordered logit modeling approach, the survey data including stated preferences were analyzed to pinpoint the important factors influencing people’s attitudes to a congestion charge and, in turn, to their transport mode choices. To accommodate the nature of, and to account for the resulting heterogeneity of the panel data, random effects were considered in the models. As expected, this study found that the amount of the congestion charge and the financial benefits of implementing it have a significant influence on respondents’ support for the charge and on the likelihood of their taking a bus to city areas. However, respondents’ current primary transport mode for travelling to the city areas has a more pronounced impact. Meanwhile, respondents’ perceptions of the congestion charge’s role in protecting the environment by reducing vehicle emissions, and of the extent to which the charge would mean that they travelled less frequently to the city for shopping or entertainment, also have a significant impact on their level of support for its implementation. We also found and explained notable differences across two cities. Finally, findings from this study have been fully discussed in relation to the literature.

Workers' attitude towards bus rapid transit : considering Dhaka, Bangladesh

The Government of Bangladesh is planning to develop and implement Bus Rapid Transit (BRT) in Dhaka city. This paper presents a stated choice survey conducted to understand workers’ attitudes toward BRT in Dhaka. The survey data are analysed using a multinomial logit (MNL) model to scrutinize social and economic factors’ impact on participant’s mode choices. Analysis results reveal that males, and workers with higher age, education qualification, and income have greater tendency towards choosing BRT.

Workers' attitude towards bus rapid transit in Dhaka, Bangladesh

This study investigates: –how travel and socio-demographic attributes act on workers’ mode choice decisions in Dhaka –whether Dhaka’s commuters would choose BRT for their work trip once implemented •Very limited research exists on users’ perceptions of BRT in developing countries’ megacities •We adopted a discrete choice modelling approach •As BRT has not yet been implemented in Dhaka, we collected Stated Choice (SC) survey data including a hypothetical BRT mode to understand factors important to workers’ mode choice decisions •We compare the impact of travel factors between Dhaka and cities of developed countries

The role of offsets in compensating for damage in the coastal and marine environments

This thesis examines the extent of which economic instruments can be used to minimise environmental damage in the coastal and marine environments, and the role of offsets to compensate for residual damage. Economic principles are used to review current command and control systems, potential incentive based mechanisms, and the development of appropriate offsets. Implementing offsets in the marine environment has a number of challenges, so alternative approaches may be necessary. The study finds that offsets in areas remote from the initial impact, or even to protect different species, may be acceptable provided they result in greater conservation benefits than the standard like-for-like offset. This study is particularly relevant for the design of offsets in the coastal and marine environments where there is limited scope for like-for-like offsets.

Transportation disadvantage impedance indexing: A methodological approach to reduce policy shortcomings

Access to transport systems and the connection to such systems provided to essential economic and social activities are critical to determine households' transportation disadvantage levels. In spite of the developments in better identifying transportation disadvantaged groups, the lack of effective policies resulted in the continuum of the issue as a significant problem. This paper undertakes a pilot case investigation as test bed for a new approach developed to reduce transportation policy shortcomings. The approach, ‘disadvantage-impedance index’, aims to ease transportation disadvantages by employing representative parameters to measure the differences between policy alternatives run in a simulation environment. Implemented in the Japanese town of Arao, the index uses trip-making behaviour and resident stated preference data. The results of the index reveal that even a slight improvement in accessibility and travel quality indicators makes a significant difference in easing disadvantages. The index, integrated into a four-step model, proves to be highly robust and useful in terms of quick diagnosis in capturing effective actions, and developing potentially efficient policies.

Workers’ attitude towards bus rapid transit: Considering Dhaka, Bangladesh

The Government of Bangladesh is planning to develop and implement Bus Rapid Transit (BRT) in Dhaka city. This paper presents a stated choice survey conducted to understand workers’ attitudes toward BRT in Dhaka. The survey data are analysed using a multinomial logit (MNL) model to scrutinize social and economic factors’ impact on participant’s mode choices. Analysis results reveal that males, workers of higher age, education qualification, and income have a greater tendency towards choosing BRT.

Significance of a short-term test drive for prospective plug-in electric vehicle consumers: An exploratory study

The test drive is a well-known step in car buying. In the emerging plug-in electric vehicle (PEV) market, however, the influence of a pre-purchase test drive on a consumer's inclination to purchase is unknown. Policy makers and industry participants both are eager to understand what factors motivate vehicle consumers at the point-of-sale. A number of researchers have used choice models to shed light on consumer perceptions of PEVs, and others have investigated consumer change in disposition toward a PEV over the course of a trial, wherein test driving a PEV may take place over a number of consecutive days, weeks or months. However, there is little written on the impact of a short-term test drive - a typical experience at dealerships or public "ride-and-drive" events. The impact of a typical test drive, often measured in minutes of driving, is not well understood. This paper first presents a synthesis of the literature on the effect of PEV test drives as they relate to consumer disposition toward PEVs. An analysis of data obtained from an Australian case study whereby attitudinal and stated preference data were collected pre- and post- test drive at public "ride-and-drive" event held Brisbane, Queensland in March 2014 using a custom-designed iPad application. Motorists' perceptions and choice preferences around PEVs were captured, revealing the relative importance of their experience behind the wheel. Using the Australian context as a case-study, this paper presents an exploratory study of consumers' stated preferences toward PEVs both before and after a short test drive.

Understanding urban rail travel for improved patronage forecasting

Improved forecasting of urban rail patronage is essential for effective policy development and efficient planning for new rail infrastructure. Past modelling and forecasting of urban rail patronage has been based on legacy modelling approaches and often conducted at the general level of public transport demand, rather than being specific to urban rail. This project canvassed current Australian practice and international best practice to develop and estimate time series and cross-sectional models of rail patronage for Australian mainland state capital cities. This involved the implementation of a large online survey of rail riders and non-riders for each of the state capital cities, thereby resulting in a comprehensive database of respondent socio-economic profiles, travel experience, attitudes to rail and other modes of travel, together with stated preference responses to a wide range of urban travel scenarios. Estimation of the models provided a demonstration of their ability to provide information on the major influences on the urban rail travel decision. Rail fares, congestion and rail service supply all have a strong influence on rail patronage, while a number of less significant factors such as fuel price and access to a motor vehicle are also influential. Of note, too, is the relative homogeneity of rail user profiles across the state capitals. Rail users tended to have higher incomes and education levels. They are also younger and more likely to be in full-time employment than non-rail users. The project analysis reported here represents only a small proportion of what could be accomplished utilising the survey database. More comprehensive investigation was beyond the scope of the project and has been left for future work.

Valuing a Natura 2000 network site to inform land use options using a discrete choice experiment: An illustration from the Basque Country

One of the main problems that public institutions face in the management of protected areas, such as the European Natura 2000 network, is determining how to design and implement sustainable management plans that account for the wide range of marketed and non-marketed benefits they provide to society. This paper presents an application of a stated preference valuation approach aimed at evaluating the social preferences of the population of the Basque Country, Spain, for the key attributes of a regional Natura 2000 network site. According to our results, individuals’ willingness-to-pay (WTP) is higher for attributes associated with non-use values (native tree species and biodiversity conservation) than for attributes associated with use values (agricultural development and commercial forestry). The paper concludes that management policies related to Natura 2000 network sites should account for both for the importance of non-use values and the heterogeneity of the population's preferences in order to minimize potential land use conflicts.

Comparison of resident and tourist preferences for public beach access

As coastal destinations continue to grow, due to tourism and residential expansion, the demand for public beach access and related amenities will also increase. As a resultagencies that provide beach access and related amenities face challenges when considering both residents and visitors use beaches and likely possess different needs, as well as different preferences for management decisions. Being a resident of a coastal county provides more opportunity to use local beaches, but coastal tourism is an important and growing economic engine in coastal communities (Kriesel, Landry, & Keeler, 2005; Pogue & Lee, 1999). Therefore, providing agencies with a comprehensive assessment of the differences between these two groups will increase the likelihood of effective management programs and policies for the provision of public beach access and related amenities. The purpose of this paper was to use a stated preference choice method (SPCM) to identify the extent of both residents’ and visitors’ preferences for public beach management options. (PDF contains 4 pages)

Are Fast Responses More Random? Testing the Effect of Response Time on Scale in an Online Choice Experiment

Scepticism over stated preference surveys conducted online revolves around the concerns over “professional respondents” who might rush through the questionnaire without sufficiently considering the information provided. To gain insight on the validity of this phenomenon and test the effect of response time on choice randomness, this study makes use of a recently conducted choice experiment survey on ecological and amenity effects of an offshore windfarm in the UK. The positive relationship between self-rated and inferred attribute attendance and response time is taken as evidence for a link between response time and cognitive effort. Subsequently, the generalised multinomial logit model is employed to test the effect of response time on scale, which indicates the weight of the deterministic relative to the error component in the random utility model. Results show that longer response time increases scale, i.e. decreases choice randomness. This positive scale effect of response time is further found to be non-linear and wear off at some point beyond which extreme response time decreases scale. While response time does not systematically affect welfare estimates, higher response time increases the precision of such estimates. These effects persist when self-reported choice certainty is controlled for. Implications of the results for online stated preference surveys and further research are discussed.

Modelling attribute non-attendance in choice experiments for rural landscape valuation

Non-market effects of agriculture are often estimated using discrete choice models from stated preference surveys. In this context we propose two ways of modelling attribute non-attendance. The first involves constraining coefficients to zero in a latent class framework, whereas the second is based on stochastic attribute selection and grounded in Bayesian estimation. Their implications are explored in the context of a stated preference survey designed to value landscapes in Ireland. Taking account of attribute non-attendance with these data improves fit and tends to involve two attributes one of which is likely to be cost, thereby leading to substantive changes in derived welfare estimates.

Exploring consumer's preferences for farmed sea bream

Sea bream (Sparus aurata) production plays a significant part in Italian aquaculture, contributing to almost 18% of national pisciculture sales revenue. In recent years, Italian firms faced higher competition from countries with lower production costs. This prompted responses toward both cost reduction and product differentiation. The objective of this study was to investigate the preferences of Italian consumers for sea bream from fish farms, with a focus on aspects of product differentiation as gleaned from the analysis of the market situation: price, product origin, type and place of fish farming, and, in particular, type of feed. Data were collected with a consumers’ survey using personal interviews conducted on a questionnaire that included a choice experiment. Consumer preferences were analyzed with choice models based on stated preference data. The models made it possible to evaluate the potential of products with different combinations of attributes for which there is currently no market information available. In particular, the country of origin emerged as an important element of consumer choice, and to a lesser degree, organic certification and fish farming in marine cages also play a relevant role and may command a price premium.