A STUDY OF COMMUTER BEHAVIOR UNDER A CHANGE IN PEAK-HOUR RAIL INCENTIVES

Abstract

In this work, I use a fixed effects model to estimate the value of early-schedule time by exploiting a change in morning-peak fare incentives. I find this value to be approximately$3.72/hour. I explore different groups of people who have varied incentives due to the policy change, and find significant heterogeneity in estimated responses and associated values of time, with values between 89 cents/hour and $6.45/hour. The lowest values are associated with targeted populations; however, I find that this is driven by a small percentage of ‘responders’. I also find evidence suggesting habit formation through a study of those who were made worse-o? by the policy. I conclude that peak-hour fare incentives could be better targeted to improve efficiency. Further work to improve the estimates obtained should include traveler characteristics and a more explicit model of crowding.