Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238287 
Year of Publication: 
2020
Series/Report no.: 
IRENE Working Paper No. 20-04
Publisher: 
University of Neuchâtel, Institute of Economic Research (IRENE), Neuchâtel
Abstract: 
Through a choice experiment conducted among 995 Swiss respondents, we study the linkages between prior investment decisions and the choice of travel mode. Our experiment design and empirical framework aims to identify the impact of electric vehicles (EVs) and to test for two behavioural deviations from the rationally optimal usage. Prior investment in a car or public transport pass could be used ex-ante as a commitment device for overcoming self-control issues, or could affect mode choices ex-post through regret effects of sunk costs. We find no evidence to support the sunk cost hypothesis, but our findings provide partial evidence in favour of commitment mechanisms. A prior investment decision decreases the consumer’s responsiveness to variation of travel time. However, such commitments do not seem to influence responses to changes in marginal travel cost. Further, we find that EV adoption does not result in a significant step-change in usage patterns above rational marginal cost reactions. Our results thus reinforce the importance of financial incentives in policies aiming at a behavioural change in travel mode choices.
Subjects: 
Transport
Behaviour
Choice experiment
Commitment
Sunk cost
Electric vehicles
Environmental policy
JEL: 
C25
C91
D01
D90
O33
Q40
Q55
Document Type: 
Working Paper

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