2.

1 INTRODUCTION

The basic concern of transportation systems analysts is to be able to

anticipate the consequences of any proposed change in a transporta-

tion system. In chapter 1 a basic framework for prediction was pre-

sented. This framework focused on the interrelationships between

transportation and the socioeconomic activity system, and three basic

types of interrelations were identified. In this chapter we shall deal

with two of these interrelations: first, that between the pattern of social

and economic activities and the short-run demand for transportation;

and second. the influence of transportation upon the long-run distribu-

tion of social and economic activities. Thus our purpose in this chapter

is to explore the behavioral aspects of transportation—the activity

system and the way we represent it for the analysis of transportation

systems.

2.2 THE NEED TO UNDERSTAND HUMAN BEHAVIOR

Transportation has always played an important role in influencing the

development of societies. In more recent history transportation has

played a major role in the development of the modern industrial city.

Cities usually develop at some natural transportation link—an inter-

section of trade routes, a river junction, a harbor. Then. as they grow

in population, they begin to expand geographically. During their early

years the major influence on development is that of the local topog-

raphy. However, as cities begin to reach a scale beyond that of

reasonable walking distance, the available transporttion technologies

play a role in shaping their forms. For example, in the development of

American cities during the middle of the nineteenth century, horse-

drawn streetcars provided radial spokes along which the development

of suburbs took place (5. 3. Warner 1962). These spokes radiated out-

ward from the central business district and served to move commuters

into and out of the center of the city. As horsedrawn streetcars were

replaced by electric-powered "trolley" streetcars, this pttern of devel-

opment along the radial spokes of the transportation arteries con-

tinued. These arteries were replaced and extended by suburban rail-

roads, which stimulated the development of even more extensive com-

muter suburbs.

With the coming of the automobile. the areas between the radial

spokes began to be filled in. Even so, until the end of World War II

the level of reliance on public transport was such that cities remained

relatively compact.

in America, with the ending of World War II. a combination of public

policies and private aspirations resulted in forces that significantly

changed the character of most cities. Growth in personal income led

to a rapid increase in the number of private automobiles and the ful-

fillment for many of the dream of a single-family house on a small lot

in the suburbs. The explosion of American population into suburbia

was accelerated and aided by this growth in auto ownership, by federal

housing policies that made mortgage money more easily available, and
by the development of extensive systems of express highways. These

express, limited-access highways allowed rapid movement for large

numbers of automobiles and trucks. radially from the central cities to

the suburbs and circumferentially among suburbs. This system of highways accelerated the
dispersal of population, businesses, and

industry. As suburban shopping centers mushroomed to bring goods

and services to the growing suburban populations, the role of central

business districts began to change. Industrial parks in the suburbs

brought jobs to where people lived.

Of course, as use of the automobile became easier and as popula-

tion dispersed, there was a corollary effect on public transit. Transit

ridership had been declining since the early 19208 as incomes had

risen and the number, of private automobiles had increased. With the

rapid postwar development of highways and acceleration of dispersion,

the decline of public transit became calamitous. As transit ridership

dropped and labor costs increased, fares were increased and service

cut back in order to stabilize deficits. These changes resulted in further

declines in use and made automobiles relatively more attractive.

This short sketch of American urban patterns illustrates the extensive

interrelationship between transportation and social and economic

aetivity (Meyer. Kain, and Wohl 1965). Similar patterns have begun to

emerge in Western Europe.

As another example. consider the growth of air travel since 1945.

The convenience of present—day intercity air travel within North America

and within Western Europe has had important effects on the behavior
patterns of businessmen on these two continents. One can make a

round trip between Boston and Washington or between London

and Paris in a single day, and many businessmen and government

officials may visit two to four cities each week.

Similarly, air transportation also provides great opportunities for

social and recreational travel. Even people with moderate incomes can

afford to take vacations, at any season of the year, for a few days or up

to a month, almost anywhere in the world. In Boston, weekends in

Miami are advertised widely; in Paris. weekends in New York or

Tangiers or even Jerusalem. . .

Similar interrelationships between transportation and social and

economic activities can be discerned in other contexts. For example, in

a country undergoing rapid development, a proposal for major improve-

ments in the national highway network raises fundamental questions.

What impact will such a highway network have on the development

pattern 7 Will it aid the economic development and social viability of

small towns and cities in the hinterland ? Or will the highway systems

and bus services make the one or two major metropolitan areas of the

country more attractive and more acCessible, so that people migrate in

large numbers to the metropolis ? Alternatively, what should be the

relative roles of rail, truck, and water for freight transport 7 The provision of transportation in a
developing country can have a significant

impact on the social and economic development patterns, and trans-

portation planning in this context must therefore quite explicitly be a

part of overall national development planning.

2.2.2 What We Are Trying to Predict

As analysts, our goal is to predict the effects of a change in the trans-

portation system on the broader fabric of society. As discussed above,

such changes in the transportation system of a region can have sig-

nificant effects on the patterns of social and economic activity. In the

short run a change in the transportation system will be reflected in

changes in travel patterns; over a longer period of time the location

and even the nature of social and economic activity may change

significantly.

To predict how the individuals and firms in a region might respond

to these changes and to understand why present conditions have come

about—why travel and locational patterns have taken the forms they

now have—we must understand human behavior. At present our understanding of human
behavior in response to transportation system

changes is far from perfect, but substantial progress is being made.

This information can be summarized in a demand function. which

is a representation of human behavior that can be used to predict how

an individual or firm, or groups of individuals or firms, will respond to

changing conditions.

2.2.3 The Dimensions of Human Behavior

LEVELS OF CHOICE

In most countries an individual's activity pattern can be defined

by the choices he or she makes about such things as employment,

including type of work, income, and location; residence, including

location, type of home, type of neighborhood, and such related factors

as schools, access to shopping, interactions with neighbors, and rents

or mortgage rates; "consumption" patterns; shopping and other per-

sonal business activities, including goods and services purchased,

shopping areas frequented, prices paid, as well as related activities

such as "browsing" or banking; and social and recreational activities,

such as visiting friends and relatives and excursions on weekends and holidays.

Each individual has a conception of the activity pattem that would

constitute a full and satisfying life. This is the "basic" demand that

motivates individual and household decisions: the desire to undertake

particular activity patterns.

There are several "levels" of choice that an individual must make

(figure 2.1 ). At the highest, most basic level is the choice of a desired

pattern of activity that reflects one's life-style aspirations. Then, in

order to undertake a particular activity pattern, the individual must be

at particular locations at particular times: this leads to basic locational

choices, including the choice of a residential location and of a place of

Life-style Aspirations

Desired Activuty Patterns

Locational Choices
3

Travel Choices

Figure 2.1 Level: of choice for an individual.

work. Such locational choices form a second level of decisions. Next.

in order to undertake the desired activities at the chosen locations, a

third level of choices is required: choices about where. when, and how

to travel.

DERIVED DEMAND

The travel choices are the ones that lead directly to a "demand" or

"desire" for travel. It is clear, then, that the demand for travel is a

derived demand, in this sense: travel is desirable not in itself but as a

means of being at certain locations at certain times, and this goal is

itself derived from the desire to undertake certain patterns of activities.

Thus, to understand the demand for travel we need, ideally, to under-

stand the baslc human desires for various activity patterns; from this

we could derive the demand for locations of activities, especially for

locations of residence and workplace, and from this locational demand

we could derive the demand for travel.

A similar hierarchy of choices exists in the freight sector. The

primary choices made by commercial enterprises include the products

to produce, the general markets to pursue, and the magnitude of eco-

nomic activity (sales, employment, investment) to engage in. In order

to achieve a desired pattern of economic activity, the firm must make locational decisions for its
production facilities and select specific

markets (that is, geographic regions) to be served and sources of raw

materials. From these choices are then derived the commodity trans-

portation choices: which commodities to ship, from where, to where.

by what means (see figure 2.2).

Clearly, in the cases of both personal travel and freight movements.

the choices at each level interact in significant ways. For example, the

Company Aspirations

(Profits. Growth)

Activity Patterns

(Product Mix. Markets.

Volumes) , o

Locational Choices

(Total Distribution System)

Travel Choices

Figure 2.2 Levele of choice for a firm.

choice whether or not to produce a particular commodity at X for sale

in market Y is determined in part by the available transportation

choices.

A WORKING HYPOTHESIS

At the present time we know most about the demand for transporta-

tion and least about the desire for certain activity patterns. Therefore, in

order to cut through the complexity of the interactions between the

transportation and the socioeconomic activity systems, we make the

following hypothesis: It is feasible to separate the long-run

shifts in the location and scale of socioeconomic activity

from the short-run behavior of the market for transporta-

tion. Under this hypothesis, in considering the demand for transporta-

tion, we may assume that the patterns of social and economic activity are

fixed. Then we can treat the related problem of the long-run shift in

socioeconomic activity separately from that of the demand for travel;

this we have called the activity shift. The separation of demand and

activity-shift models—the type 1 and type 2 relationships in the ana-

lytical framework introduced in chapter 1—reflects this hypothesis.

Thus, recalling our earlier definition of a demand function as a repre-

sentation of human behavior. we find it convenient to separate the

"total" demand function into two parts. The transportation demand

function is a representation of human behavior which can be used to

predict how individuals or firms, or groups of individuals or firms, will

change transportation choices in response to changes in future condi-

tions. The activity-shift function is a representation of human be-

havior which can be used to predict how individuals or firms, or groups

of individuals or firms, will change activity and location choices in

response to changes in future conditions.

In a sense. the basic difference is in the time scale over which deci-

sions take place. Transportation decisions can be made and changed

very quickly. Changes in the location and scale of socioeconomic ac-

tivity take much longer to occur. Therefore. another way of interpreting

the hypothesis is that it is useful to distinguish between short-run and

long-run decisions. '

This hypothesis is one that has often been made in practice. and it

is useful for teaching purposes. However. ongoing research suggests

that it may be too simple. We shall discuss this further in chapter 11,

but for the rest of this chapter we shall assume its validity. For simplicity, whenever we say
"demand" we shall mean “demand for trans-

-portation"_unless explicitly stated otherwise.

2.3 BEHAVIOR AT THE INDIVIDUAL LEVEL

The problem of predicting the demand for transportation can be‘ap-

proached at two levels: that of the individual or that of groups of indi-

viduals. By an individual we mean any group that behaves as a single

unit in making transportation decisions. Such a unit can be: for goods

movements, a firm, a part of a firm, such as the shipping or traffic

department, or an individual such as a traffic manager or shipping

clerk; for personal travel, a household, consisting of several interacting

persons, or a single person. The essential point is that when a unit

consists of more than one person, they interact in reaching a decision.

For example, in a household where several drivers (parents and teenage

children, say) share one automobile, the decisions about use of the

automobile in the evening and on weekends may involve a collective

decision among competing demands.

For simplicity, we shall use the term consumer to denote a single

decision-making unit, whether that unit consists of one or several

persons.

that we face a tremendous challenge: People are complex; their pref-

erences and decision-making behaviors are very different and are

continually changing. In order to predict future travel, we must under-stand human behavior in a
way that can produce operational results.

Thus any model for explaining consumer behavior must indicate (1)

what alternative choices consumers perceive; (2) what consequences

of these alternatives they consider important: and (3) how they make

their choices from among the perceived alternatives.

ALTERNATIVE CHOICES

The basic decisions with which the consumer must deal from the point

of view of transportation are whether to make a trip. where to make the

trip, at what time to make the trip, and which mode and route to take.

These decisions are obviously highly interrelated. The extent of this

interrelationship depends on, among other things, the purpose of the

trip. For example, in an urban area trips between home and work have

the "whether" and "where" fixed; the individual generally has a fixed

residence and a fixed workplace and is committed to making the home-

to-work trip regularly. The time, mode, and route taken are usually

determined together and once a pattern is established, the typical

consumer rarely changes these decisions. 0n the other hand. Consider another example: where to
go on a summer weekend. For this kind of

recreational trip, all the options are open and are probably determined

simultaneously.

ATTRIBUTES

What factors does the consumer take into account when choosing

among these alternatives? ln introducing the basic framework of

analysis in chapter 1 , we defined the concept of service level, S: the

service variables are those attributes of the transportation system

that influence the consumer's decisions as to whether, where, when,

and how to make a trip. In general, each consumer considers a num-

ber of service variables. Therefore, the consequences are expressed as

a vector. 5 = (81, 32, . . . , S, . . . . S"). An illustrative list of service

variables is given in table 2.1. As this list shows, consumers may con-

sider many attributes of transportation service. In general, different

consumers will consider different service attributes to be important,

reflecting differences in their socioeconomic characteristics and pref-

erences. Since it is usually not possible to include explicitly all possible

service variables when forecasting travel demand, an important prac-

tical problem is to identify those service variables that have the great-

est influence on consumer choices. Another important and related

practical problem is that some service variables cannot readily be

quantified ("comfort." "safety." "perceived security").

Furthermore, even such seemingly simple attributes as "travel time"

turn out to be complex in their influence on traveler behavior. In table

2.2 we show some of this complexity by breaking down travel time

into some of its major components. These components are perceived

differently in different situations; for example, in some travel forecasts

"excess time" or "out-of-vehicle time" is defined as "all time com-

ponents other than in-vehicle travel time."

In addition, "time" is not always synonymous with "distance" from

the viewpoint of consumer behavior. For example, numerous surveys

have shown that walking distance is a very important determinant of

bus ridership—very few people will walk more than a quarter miie to

use a bus. Thus walking distance should usually be one of the service

parameters used to predict ridership on a bus system. ‘

On the other hand, for a door-to-door system such as the demand-

responsive bus—"dial-a-ride"—there is no walking required. so walk-

ing distance is obviously not a factor. However, the reliability of total

trip time for dial-a-ride may be lower than for most transportation sys-

'tems, since it is a demand-responsive service, so this service variable

Table 2.1 Illustrative service attributes

—————————.__________

'I'lme'i "

total trip time

reliability (variance in trip time)

time spent at transfer points

frequency of service

schedule times
Cost to user

direct transportation charges such as fares. tolls. fuel. and parking

other direct operating costs such as loading and documentation

indirect costs such as the cost of acquiring, maintaining. and insuring an auto-

mobile or, for freight. warehousing, interest. and insurance

Safety

probability of fatality or of destruction of cargo

probability of accident of any sort

probability distribution of accident types (shock vibration, ‘water damage. and

so on)

perceived security

Comfort and convenience for user.

2.3.2 Consumer Behavior Model I

In this first model it is assumed that the consumer: formulates his

preferences explicitly, identifies explicitly all the alternatives open to

him, identifies the consequences of each alternative. and evaluates the

alternatives and chooses among them using a well-defined decision

rule.

REPRESENTING PREFERENCES
A key feature of this model is the approach taken to representing the preferences of the consumer
(see, for example, Baumol 1965, Hender-

son and Quandt 1 958).

The preferences of consumers vary not only in which service attri-

butes they consider important, but also in the relative values they

place on various attributes. To represent this variation the model uses

the concept of an indifference curve, which is a curve indicating

all combinations of choices among which the consumer is indifferent.

Figure 2.3 shows a set of indifference curves involving two service

attributes, travel time t and out-of-pocket cost 0. This set of curves

represents the preferences of a particular consumer: the consumer is

essentially indifferent to all combinations of time and cost on a single

curve but has definite preferences among curves. For example, he is

indifferent between the combination of time and cost represented by

point A on curve I and that combination represented by point B. On

the other hand, both of these points are preferred to point C on curve

ll, because point C has both a higher travel time and a higher cost than

either A or 8.

Furthermore, A and B are both preferred to 0. Although D has lower

cost than 8, its time is sufficiently greater than 8‘5 so that it is still less

desirable. In addition, the consumer is indifferent between C and D, so

since 3 is preferred to C, 3 must also be preferred to D.

The set of indifference curves can be expressed in functional form as U = f(S, o), y (2.1) ‘

where S is the vector of service attributes and fl is a vector of param-

eters. Two specific forms of interest are the product form,

U = atficr, . (2.2)

and the linear form.

U = at + 50. (2.3)

in these cases 8 = (t, c) and 0 = (a. 13) or (at, (3, 7). Each of these

equations defines a family of curves; each curve shows, for a specific

value of U, those combinations of t and c that are equally preferred by

the consumer. The product form (2.2) would generate a family of in-

difference curves like figure 2.3; the linear form (2.3), a family of in-

difference curves like figure 2.4. Different curves correspond to different

values of the quantity U.

The value of U can be interpreted as a measure of the degree to

which a particular combination (t, c) is desired by the consumer.

When it is useful to do this, U is called a utility and the functions

defining the indifference curves are called utility functions. Utility is

valued positively; that is, utility is so defined that if U A > Up, then the

consumer prefers A to D. For example, in figure 2.3 U‘ > Un because

the consumer prefers either A or B to either C or D.

Note that the service attributes of time and' cost are negatively valued; that is, the consumer
prefers less time and/or less cost, rather

than more. So, as t and/or c increase, the corresponding values of U

decrease. The parameters in 0 must have corresponding signs. Some-

times the term disutiiity or negatively valued utility is used. in

this case, instead of maximizing utility, the consumer is assumed to

minimize disutility. The result is the same. To prevent confusion, we

shall always use the term utility; whether the utility actually reflects a

disutility will be clear in a particular context from the definitions of

the service attributes used and the values of the parameters in 0.

Utility can be measured in any convenient units: time, monetary units, _

or, most generally, "utiies." The values of the parameters of these indif-

ference curves explicitly express the preferences of the consumer. For

example, one useful property of these curves is represented by the

trade-off ratio, the slope of the curve. For the linear indifference

curve, the trade-off ratio is ctr/,3. This ratio expresses the "value" of

time to the consumer, that is, the amount he would be willing to pay

,to save one unit of travel time. For every minute of time saved, the