SP Vs RP

Mg Htet Okkar Kyaw

PhD.CTE-2
Department of Civil Engineering
Yangon Technological University
Introduction
• In general transportation planning, surveys are meant to
capture travelers’ current travel behavior.
• For instance, one is interested in knowing the actual mode a
traveler is using, actual travel times, destinations, and so
forth.
• This is known as Revealed Preference (RP) data, as the
traveler is currently experiencing that behavior and making a
choice based on his or her knowledge of the available travel
options.
• Another type of data is based on Stated Responses (SR), in which
hypothetical situations are presented to the respondents, who are
then asked to choose based on the given attributes for each
alternative, without necessarily experiencing them in real situations
• SP surveys offer a great advantage for overcoming the problem of
the “new option”, whereby an analyst seeks to forecast the use of a
new alternative (such as high-speed rail), particularly when the new
option is very different from existing alternatives
• use of SP surveys has become widespread in a range of fields such
as marketing, transport, health economics, and agricultural and
environmental economics
 Stated-preference (SP)
• Stated-preference techniques base demand estimates on an analysis of
the response to hypothetical choices; these can cover a wider range of
attributes and conditions than the real system.
• data from real markets is not available for predicting behaviour or
eliciting reliable preference functions, researchers have had to turn to
stated preference (SP) methods.
• These cover a range of techniques, which have in common the
collection of data about respondent’s intentions in hypothetical settings
• The three most common SP methods have been contingent valuation
(CV), conjoint analysis (CA) and stated choice (SC) techniques
 Contingent Valuation Method (CVM)

• is used to estimate economic values for all kinds of ecosystem

and environmental services.
• It can be used to estimate both use and non use values, and it is
the most widely used method for estimating non-use values
• Contingent Valuation is a method of estimating the value that a
person places on a good. The approach asks people to directly
report their willingness to pay (WTP) to obtain a specified good,
or willingness to accept (WTA) to give up a good
• Contingent valuation is a survey based method of estimating
how much individuals would be willing to pay for
environmental or natural resource amenities, using a
hypothetical market

 Value of highway landscaping: Survey travelers to

determine what they would be willing to pay for highway
landscaping,
 how they value it relative to other trip characteristics with
established values, such as travel time.
Case study of CVM
Case study
• urbanization and severe air quality deterioration in Pakistan have
increased citizens’s concern towards air pollution.
• This study, conducted in November, 2016, aimed to develop
relationship between degraded air quality and resident’s
willingness to pay for improved air quality in city of Lahore,
Pakistan through contingent valuation method to quantify an
individual’s willingness to pay for improved air quality.
• Hypothetical market was created and 250 respondents, selected
through random sampling, were asked to respond to pre tested
questionnaire
• Results revealed that 92.5% of respondents showed positive willingness to
pay and average predicted willingness to pay by each person was $9.86 per
month.
• Pakistan is among the lower income countries with no rigid budget allocation
for improvement in air quality,
• People of Pakistan are willing to pay to reduce air pollution load.
• One of the factor which effected the positivity of willingness to pay is that, a
quite large number of people were suffering from pollution related
respiratory disorders like asthma, chronic bronchitis, wheezing, cough, and
chest congestion
• Only 7.5% of respondents were not interested to pay for improved air quality
which reported unconcerned attitude and lack of environmental awareness.
 Conjoint analysis
• Conjoint analysis is a form of statistical analysis that firms use
in market research to understand how customers value
different components or features of their products or services
 Stated Choice Method

• Stated choice studies are similar to CA methods insofar as respondents are

presented with a number of hypothetical alternatives; however, the two

methods differ in terms of the response metric

• SC methods typically present only a few alternatives at a time (and in most

cases only two), changing them and having respondents repeat the choice task

• CA tasks typically present respondents with a relatively large number of

alternatives, simultaneously, to rate or rank

 Revealed Preference Survey
• revealed preference theory looks at actual consumer choices within a
proxy market good or service
• Revealed preferences surveys (RP) are about choices that individuals
have actually made.
• In terms of a public transport surveys, the revealed information would
be the actual trip or trips made by the user considering origin,
destination, origin stop, destination stop, journey purpose, and the
mode of transport they chose to use from the available alternatives.
• The strong point of this type of survey is that it provides us with the
real choices made by users in a determined context of constraints.
Thank You For Your Kind
Attention