Travel Demand for Metro in Ho Chi Minh City: a Discrete Choice Experiment Analysis
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116 Nguyen Thanh Son & Nguyen Duy Chinh / Journal of Economic Development, 24(3), 116-136 Travel demand for metro in Ho Chi Minh City: A discrete choice experiment analysis NGUYEN THANH SON [email protected] NGUYEN DUY CHINH [email protected] ARTICLE INFO ABSTRACT Article history: By employing discrete choice experiment with face-to-face survey data of 135 local inhabitants in Ho Chi Minh City, this paper analyzes Received: preference for the urban metro network transportation. The result Jan., 16, 2017 reveals that seat availability, time, and cost reduction of the trip with metro robustly incite users to utilize this transportation service. Received in revised form: Passengers of metro are willing to pay 0.606 and 4.106 thousand VND May, 22, 2017 for one minute reduction of travel time and seat availability on the train cart, respectively. Furthermore, monetary welfare gained for a Accepted: switch to metro is 64.3 thousand VND for each individual. Some June, 30, 2017 implications regarding ticket prices and policy are also discussed. Keywords: Discrete choice experiment Urban transportation mode Metro travel demand Ho Chi Minh City Nguyen Thanh Son & Nguyen Duy Chinh / Journal of Economic Development, 24(3), 116-136 117 project, which was proposed in 2002, has 1. Introduction attracted attention of the local government as it is expected to resolve the traffic Urban traffic congestion is one of the congestion issue. The project comprises six most frequently confronted issues in lines and will be implemented based on developing countries in Southeast Asia, Build-Operate-Transfer (BOT) and Public especially in Vietnam. Owing to the inability Private Partnerships (PPP). Currently, two of urban transportation infrastructure first metro lines have been constructed since development to keep pace with the growing 2009 and will be in operation in 2020. The number of private vehicles, the congestion posed question is, under these situation in major cities, namely Hanoi and circumstances, whether citizens will make Ho Chi Minh (HCMC), has been further use of the metro in substitution for other aggravated in recent years. With the transportation means or continue using population of nearly 8 million in HCMC in private vehicles. This requires determinants 2013 (General Statistics Office of Vietnam, of transportation choice and probabilities of 2013), vast travel demand arises and usage to be respectively examined and accompanies a large number of motorbikes estimated. Furthermore, to assist in policy and cars. Reportedly, the volume of making processes, welfare changes for registered vehicles in HCMC witnessed a metro use and attribute improvements will fivefold increase from 1.1 to 5.43 million in also be analyzed. The results of this study the period of 2000–2011 and is expected to are expected to be useful to policy makers, rise by 2 million, reaching 7.43 million by urban planners, and administrators of the the end of 2015 (Department of Transport railway project in terms of demand forecast, HCMC, 2016). Coupled with around 1 prices set for the metro service, and public million motorbikes immigrating from other transportation planned for the city in the provinces, the ratio of motorcycle per person future. could be exorbitant. However, the city space This study applies discrete choice allocated for transportation, in comparison experiment (DCE) method with data of with that of other cities worldwide, in individuals in HCMC to explore the choice average (20–25%), is approximately 7.8% preference to metro transport. Justification lower. On the other hand, the public bus for the application of DCE method could be service, which is initially anticipated to made by the following points. First, DCE is alleviate the transportation burden of the a commonly exercised method in demand city, has been unsuccessful. To be specific, estimation or valuation of goods and barely 5% of the city population utilizes this services, especially when they are service and most citizens choose motorbike hypothetical or not yet accessible (Lancsar as their main transportation mode (Vu & Do, & Louviere, 2008), which is the case of 2013). metro network in HCMC. Second, given the Lately, the Ho Chi Minh City Metro difficulty in sampling involved in large 118 Nguyen Thanh Son & Nguyen Duy Chinh / Journal of Economic Development, 24(3), 116-136 populations such as HCMC, DCE could level (McFadden, 2001). prevail as a fitting method. To further Marschak (1959) first introduced elaborate, while non-experimental methods, Thurstone (1927)’s concepts into economics binary analysis for instance, could collect by proposing random utility maximization information relating to one actual choice for theory in which an individual’s utility is each observation only, DCE, on the other maximized using choice probabilities. The hand, allows for choice repetition for each theory had been developed into theoretical respondent. This effectively produces larger framework by Manski (1977), before dataset and robust estimates thanks to extended into analytical framework in many variations in attribute levels (Bateman et al., studies (McFadden, 1980; McFadden, 1986; 2002). Third, DCE has the ability to draw McFadden & Train, 2000). These forth monetary benefit (willingness to pay) frameworks have been widely adopted in (WTP) for individual characteristics and the many fields of research, ranging from hypothetical scenario as a whole, which medicine and economics to transportation, could potentially be used as inputs in project and diversely tailored by incorporating appraisals and policy making process different econometric techniques, including (McIntosh, 2006). categorical regression models and structural equation modelling (Rungie et al., 2011). 2. Literature review In the field of transportation research, despite the vast amount of empirical DCE method has its theoretical literature, studies concerning travel mode foundations in the attribute theory of choice considerably vary due to a wide consumers (Lancaster, 1966) and random assortment of different choice set designs, utility theory. While the former emphasizes econometric techniques, and data the importance of attributes of commodities employment. Several common experiment in utility acquisition, the latter, on which the designs are orthogonal design, D-efficient analytical framework of DCE is based, is design, and random design. Econometric- derived from the psychological study of wise, multinomial logit, nested logit, mixed Thurstone (1927), which argued that logit, heteroskedastic extreme value, and formulation of an individual’s choice is a multinomial probit are popular models (Kjær, result of a process in which random 2005). components are associated with alternatives, Given characteristics of the decision given that the decision maker has full maker only, multinomial logit is the dominant realization of the choice. If the actual stimuli model in the literature. However, several in this theory were replaced with satisfaction, earlier studies are different in terms of or in other words, utility, then the resulting experiment design. For example, while choice could be explained by an economic Brewer and Hensher (2000), Leitham et al. choice model where an individual will choose (2000), and Garrod et al. (2002) utilized the alternative producing the highest utility orthogonal design with unlabeled Nguyen Thanh Son & Nguyen Duy Chinh / Journal of Economic Development, 24(3), 116-136 119 transportation alternatives and randomly (2009), Hess and Rose (2009), and Puckett designed task assignment, Wang et al. (2000), and Hensher (2009). A typical study with Henser and Prioni (2002), Zhang et al. (2004) random design in this category is Train and employed orthogonal design in conjunction Wilson (2008). with blocked attribute design for choice sets. Other less common econometric models Other less common designs are typically such as ordered logit, ordered probit, and rank adopted in the study of Cantillo and de Dios ordered logit were applied in studies of Ortúzar (2005) with D-efficient design and Wang, Hensher and Ton (2002), de Palma Hollander (2006) with random design. and Picard (2005), Ahern and Tapley (2008), Nested logit model, in comparison with and Beuthe and Bouffioux (2008). multinomial logit, allows for grouping of In the scope of HCMC, there are also similar alternatives in choice sets, typically several studies concerning urban employed in studies related to public transportation mode choice. The earliest transportation and private vehicle choice. study of Nguyen (1999), for instance, However, like studies that utilized employed a multinomial choice model of multinomial logit technique, different designs private vehicle to calculate commuter values were employed. Hensher and King (2001) of time, which would be subsequently used to applied orthogonal design with labeled make suggestion for congestion toll. The alternatives, whereas in other studies (e.g., model regards trips as units of analysis, thus Bhat & Castelar, 2002; Jovicic & Hansen, it is capable of taking into account both 2003; Cherchi & de Dios Ortúzar, 2006; modes of specific and socio-economic Espino et al., 2006) revealed preference data factors. However, its specification is were combined with stated preference data to relatively simple, and public transport option alleviate technical limitations occurring only is left out in this study. when one type of data is used. Later studies of mode choice in HCMC To relax some statistical assumptions