Tradable permits and travel behavior

Changes in individuals’ travel behavior are crucial in order to reduce traffic congestion, as well as improve individuals’ travel experience and wellness. An innovative economic policy measure known as tradable permits has recently been proposed for travel demand management. However, it is typically discussed in theoretical studies and lacks empirical tests. This thesis focuses on the effectiveness of tradable permits (Chapters 2 to 4) and examines travelers’ decision-making processes regarding travel time uncertainties (Chapter 5). Chapter 2 investigates the effectiveness of the tradable permit scheme with respect to reducing “rush-hour” breakfasts, as well as participants’ rationality in response to the policy. The results show that the tradable permit scheme significantly reduced rush-hour breakfasts by about 20%. Participants are not perfectly rational when responding to the tradable permit scheme. Chapter 3 improves on and tests the tradable permits scheme used in Chapter 2 in a more general situation: daily commuting by car in the morning, using data from a 2-month field experiment with 358 real car drivers in Beijing. The results suggest that both tradable permits and congestion charges can significantly reduce the day-average number of points, by about 28% and 26% respectively for an average participant. Chapter 4 investigates the relative performance of congestion pricing versus tradable permits under uncertainties in a bimodal network, with traffic externalities that only affect travelers and societal externalities that extend beyond travelers. The focus in this case is infection risk, as in the COVID-19 pandemic. Numerical results show that pricing regulation can be expected to perform better than a tradable permit scheme when there are uncertainties on private infection cost. However, the government can enhance the performance of tradable permits by allowing permits to be bankable or by implementing daily government intervention in buying or selling permits in response to the realization of stochastic parameters. Chapter 5 explores travelers’ ambiguity attitudes toward and beliefs about travel time uncertainty, through an online experiment in England with 1200 travelers. The results show that source preference existed in real commuting trips. Both information and experience reduce ambiguity-generated insensitivity, and but have opposite influences on ambiguity preferences. Overall, this thesis demonstrates and confirms that the tradable permits scheme works well in practice. It also reveals travelers’ ambiguity attitudes and beliefs toward travel time uncertainties, and confirms that travelers’ ambiguity attitudes diverge from the neutral case for commuting trips, and differ between travel modes. The results inform policymakers regarding the design and implementation of a tradable permit scheme in transport, and help them better understand the psychological preferences that motivate travelers’ behaviors.