Travel Mode Choices in a Greening Market: The Impact of Electric Vehicles and Prior Investments

Abstract

Through a choice experiment conducted among 995 Swiss respondents, we studied the linkages between prior investment decisions and the choice of travel mode. Our experimental design and empirical framework aimed to identify the impact of electric vehicles (EVs) and to test for two behavioral deviations from rationally optimal usage. Prior investment in a car or public transport pass could be used ex ante as a commitment device for overcoming self-control issues, or could affect mode choices ex post through the regret effect of sunk costs. We found no evidence to support the sunk cost hypothesis, but our findings provided partial evidence in favor of commitment mechanisms. A prior investment decision decreased the consumer’s responsiveness to variation of travel time. However, such commitments did not seem to influence responses to changes in marginal travel costs. Further, we found that EV adoption in the experiment did not result in a significant step-change in hypothetical usage patterns above rational marginal cost reactions. Our results thus reinforced the importance of financial incentives in policies aimed at a behavioral change in travel mode choices.

Who is Afraid of Electric Vehicles? An Analysis of Stated Ev Preferences in Switzerland

“…Our data stem entirely from our choice experiment, as described in Section 3.1. The SHEDS sampling ensures representativeness at the Swiss-level (excluding Ticino) (Weber et al, 2017), and our choice experiment largely matches this (for further details see van Dijk et al, 2021). For this study we analyse respondents who choose to 'purchase' a car in the experiment, giving 882 respondents.…”

“…We embed a choice experiment as part of the annual Swiss Household Energy Demand Survey (SHEDS). 8 For a detailed description of our experimental design, see van Dijk et al (2021). 9…”

“…We set the available car technologies and attributes to match the newest market standards, and include a range of BEVs and PHEVs, in addition to conventional hybrids (CHs) and ICEs. Asking respondents to purchase a new car from these alternatives (or no car), simulates car market developments over the coming 5 years or more as consumers decide to replace existing vehicles or buy new ones (van Dijk et al, 2021;Comparis, 2013). We employ a mixed logit model to analyse responses, which allows us to account for heterogeneity in respondent sensitivity to car attributes and correlations between alternatives.…”

End of the ICE Age: the economics of the green transport transition

“…For a detailed description of our experimental design, see van Dijk et al (2021). From 5515 total respondents, 995 are randomly assigned to take our experiment.…”

“…We ask respondents to purchase a particular car size, or no car, followed by a choice of car from the above fuel-alternatives. This somewhat simulates car market developments as consumers decide to replace existing vehicles or buy new ones (van Dijk et al, 2021). We employ a mixed logit model to analyse responses, which allows us to account for heterogeneity in respondent sensitivity to car attributes and correlations between alternatives.…”