Segmenting the market for new modes using stated and revealed preferences

Abstract

The paper describes a new method for segmenting the transport market on the basis of choice set heterogeneity, using a combination of revealed preference (RP) and stated preference (SP) data obtained from user surveys. The method refines previous definitions of mode captivity by differentiating between current automobile captives whose resistance to transit is enduring (due to lifestyle preferences and constraints), and those whose captivity is transient (i.e., they are willing to consider switching to transit if a suitably attractive new alternative is offered in the SP game). We test the methodology using data from Johannesburg, South Africa. By segmenting the market on this basis before estimating a mode choice model, the model fit is improved as compared with the conventional segmentation technique that defines captivity solely on automobile ownership and access to transit variables. It also delivers useful insights into preference heterogeneity between the captivity groups, which is especially helpful when planning for a new mode or service, as present patterns of subjective captivity may change when new options become available.