The Effect of Fairness on individual’s Acceptability of Road Pricing Policy

Kuang-Yih YehHao-Ching Hsia

National Cheng Kung University

OUTLINE

• INTRODUCTION•SURVEY DESIGN•MODEL SPECIFICATION•EMPIRICAL STUDY•CONCLUSIONS

INTRODUCTION• Continuous growth and excessive use of private

vehicles would result in serious environmental problems and traffic problems, such as, global warming, air pollution, illegal parking, traffic accident, as well as traffic congestion etc.

• Based on the following concepts -“Energy Conservation & Carbon Reduction” and “Sustainable Development”, we try to increase the utilization of public transportation, reduce traffic congestion, and solve environmental problems.

INTRODUCTION•The Practical Measures of Travel Demand Management

DIMENSIONS STRATEGIES MEASURES

Transportation

Efficiency improvements of

transportation facilities

Disperse traffic peak time

Increase occupancy of vehicles

Restriction

District restriction

Route restriction

Parking restriction

Pricing

Road pricing

Parking pricing

Taxation

Non-Transportation The change of city and society

Urban form

Society attitude

Technology improving

INTRODUCTION• Major barrier to

implementing road pricing is low public acceptance.▫Road infrastructure used to

be a free good or service, but now payment of usage is necessary in the case of road pricing!!

▫Implementing this policy may result in decay of business performances in the proposed charge zone.

Why should I pay for it?

My business!!

INTRODUCTION

•Different stakeholders have distinct concerns and desired objectives. ▫Authority: reducing the usage of private car▫Store owner: more consumers▫Driver: low cost or free

• In order to increase public acceptance of road pricing policy, it is necessary to reconsider the content of road pricing policy.

INTRODUCTION•Parking Deposit System (PDS)

▫It is introduced by Japanese scholars of Nagoya University.

▫It is different with traditional RP. It takes both charge and refund into consideration at the same time.

Visitors who

enter the charge zone

For passing through

(no parking)

For some purposes(parking) Parking in

the parking lot

If no shopping, just levy congestion fee.

If shopping, they can use refund for shopping.

If no shopping, they can use refund for parking.

If shopping, they can use refund for shopping or parking.

Parking at the

roadside

charge＆

refund

charge

HOW PDS WORKS?

They can use refund when parking in the parking lot.

They are levied fee upon area entry.

They can use refund when shopping in the store.

To enter the charge zone, visitors have to pay the fee.

1 2If parking in the specific parking lot, they can use the refund.

If shopping in the specific stores, they can use the refund.

Enter the charge zone, you have to pay NT$○○.

Parking fee is NT$ 100, deduct form refund NT$ ○○, you have to pay NT$△△.

I want to use my refund NT$○○.

Your product is NT$2,500.

Parking lot

Store

SOCIAL INTERACTION MATTERS?

•The social psychological aspect▫Public rejection of road pricing can be regarded as a

phenomenon of social dilemma. ▫Individual’s behavior depends on other members’

behavior in the reference group.

•The effect of social interaction on individual’s decision behavior has been taken into consideration in this study by stated preference survey.

OBJECTIVES

•To analyze the effects of the amount of charge and social interaction on policy acceptance by using a choice behavior model of acceptance.

•To compare the difference between the acceptance of traditional RP and PDS.

TAINAN, TAIWAN

ANPING, TAINAN

• The local traffic of Anping commercial district is always congested on weekends and holidays.

• The business is very active in Anping commercial district on weekends and holidays.

• To examine the public applicability of road pricing policy in the areas where have serious traffic congestion problems except for city center.

SURVEY DESIGN• TARGET SAMPLE

▫Visitors using private vehicle

• SURVEY METHOD▫Face-to-face interview + questionnaire survey

• SURVEY ITEMS▫ Individual characteristics of visitors▫general visiting situation of visitors▫ trip characteristics of visitors▫personal assessment of existing traffic environment and

policy▫personal assessment of RP▫personal assessment of PDS

SURVEY DESIGN•Proposed Charging Zone

SURVEY DESIGN

•Scenario design of Stated Preference Survey▫There are total 24 (=8 ╳ 3 )types of

scenario.Case charge refund net feeapproval rate of other

visitors

1 50 50 0

10% approval

50% approval

90% approval

2 50 30 20

3 120 120 0

4 120 80 40

5 120 40 80

6 250 250 0

7 250 170 80

8 250 80 170

MODEL SPECIFICATION• To establish a choice behavior model of

acceptance for RP and PDS

?no refund with refund

RP PDSapprovaldisapproval

??

REFERENCE GROUP

Decision of two policies is viewed as non-independent and correlated.

Bivariate Binary Probit Model(BBP)

APPROVAL DISAPPROVAL

approvaldisapproval

MODEL SPECIFICATION• Bivariate Binary Probit Model Under Market

Segmentation▫ which based on “fairness”(assessment of fairness

of RP)

Type Number Percentage

Fair group 113 54.6%

Unfair group 94 45.4%

Total 207 100.0%

variables

FAIR GROUP UNFAIR GROUP

RP PDS RP PDS

Coefficient (t-value) Coefficient (t-value) Coefficient (t-value) Coefficient (t-value)

constant 0.966 ** (2.48) 1.458 *** (4.05) 1.662 *** (3.79) 1.954 *** (5.10)

Group behavior

other visitors’ approval rate

0.46 *** (2.65) 0.097 (0.44)

Policy variables

RP charge -0.011 *** (-10.01) ─ -0.012 *** (-8.84) ─ ─

PDS charge ─ -0.010 *** (-6.85) ─ ─ -0.016 *** (-11.03)

PDS refund ─ ─ 0.006 *** (3.43) ─ 0.012 *** (6.92)

Individual variables

age 0.092   (0.46) -0.212   (-1.17) -0.127   (-0.62) -0.288   (-1.48)

income -0.047   (-0.16) -0.420   (-1.58) -0.326   (-1.26) -0.707 *** (3.04)

visit frequency -0.094   (-0.42) -0.313   (-1.60) -0.964 *** (-3.03) -0.653 *** (-2.84)

frequency of car use

0.131   (-0.67) -0.119   (0.56) -0.471 * (-1.77) -0.061   (-0.21)

Correlation 0.198 0.444

Sample size 339 (1133) 282 (943)

Hit ratio 52.80% 59.92%

*** Variables statistically significant at the 99% confidence interval.*** Variables statistically significant at the 95% confidence interval.*** Variables statistically significant at the 90% confidence interval.

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 10%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% fair group(charge NT$75)fair group(charge NT$100)all sample(charge NT$75)all sample(charge NT$100)

Other Visitors’ Approval Rate

Ind

ivid

ual A

pp

roval R

ate

33.74%

44.94%

The equilibrium of social interaction ─ RP Policy

71.69%

58.00%

59.75%

46.95%

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 10%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% fair group(charge NT$150, refund NT$75)fair group(charge NT$200, refund NT$100)all sample(charge NT$150, refund NT$75)

Other Visitors’ Approval Rate

Ind

ivid

ual A

pp

roval R

ate

The equilibrium of social interaction ─ PDS Policy

36.67%

34.34%

18.82%

44.40%

53.84%

28.58%

•The effect of charge scheme on individual’s decision of acceptance is significant.• The higher the charge is, the lower the visitors’

approval rate of RP and PDS is. • The higher the refund is, the higher the visitors’

approval rate of PDS is.

CONCLUSION

CONCLUSION• The effect of social interaction on individual’s decision of

acceptance is significant to fair group but not significant to unfair group.

• However, the signs of the social interaction variables in both models are positive. It is recognized that the effect of social interaction on human behavior is possibly existing.

• The persuasive communication method can be implemented to reduce the unfairness of policy that people feel.

CONCLUSION•The uncertainty of PDS is evident

for visitors.• The higher the charge is, the lower the

equilibrium of social interaction of RP and PDS is.

• The comparison of social interaction equilibrium between RP and PDS shows that the former is bigger than the later as the net fee is the same.

• The possible reason might be that visitors are not sure how and where to spend the refund.

How do I use this refund?

Where can I use this refund?