A Latent Class Nested Logit Model of Intercity Bus Carrier Choice

Abstract

This study examines carrier choice for the intercity bus by using a latent class model with nested logit formulation, which allows similarities among carrier alternatives as well as individual preference heterogeneity. The stated preference experiments were designed based on a number of intercity bus attributes. Empirical data was collected from passengers who traveled on two major intercity bus routes in Taiwan. Empirical results indicate that all designed bus attributes were perceived to be important for choosing intercity bus carriers. Moreover, some intercity bus carriers had common unobserved components, making them closely competitive in the routes studied. Estimation of the preferred latent class nested logit model indicates a three-segment solution and that the bus passengers are generally willing to pay more for attributes such as on-board comfort and driver behavior.