Reference Points in Commuter Departure Time Choice: A Prospect Theoretic Test of Alternative Decision Frames

Abstract

Prospect theoretic hypotheses about the value function are considered in the context of morning commutes. After a review of the formulations of utility functions in the past analyses of commuter departure time choice, this study adopts a formulation where the desirability of an arrival time at work is determined based on decision frames defined in terms of reference points. Probit models are applied to the data collected from randomly selected commuters of a bedroom community in the Kyoto-Osaka-Kobe metropolitan area of Japan, in order to estimate value functions empirically. Two alternative decision frames are compared based on the results of estimation and the empirical validity of the basic properties of the value function is examined.

Keywords:

• Commuter departure time
• Prospect theory
• Value function
• Decision framing

Authors would like to thank anonymous reviewers for their valuable comments on an earlier version of this article.

Notes

¹Note that the cumulative prospect theory is an improvement over the original prospect theory as it handles more than two prospects better than the original version. However choices made on binary outcomes are equally handled in both versions of the theory. Since we have two alternatives in this study, that is, whether departure time will be changed on the next day or not, and the notation is more straightforward in the original version, the original prospect theory is given in this study. The reader interested in the cumulative prospect theory should consult Kahneman and Tversky (2000).

²An exception is the study by Jou and Kitamura (2002).

^a In 10,000 Yens.

^a Minutes.

³It might be the case that departures greater than 60 minutes might be conditioned on some extraneous element such as an appointment on the way to work.

⁴Higher DuMouchel index value indicates better fit to the data.