Willingness To Pay for Advanced Traveler Information Systems: SmarTraveler Case Study

The issue of travelers' adoption of an advanced traveler information system (ATIS) and willingness to pay for such information services is addressed. A case study is presented of SmarTraveler, an ATIS that provides, via telephone, real-time location-specific traffic and transit information in the greater Boston area. The model is an integrated system of discrete choice and latent variable models. It predicts travelers' frequency of use and subscription under varying pricing scenarios. Two models are presented: one for current SmarTraveler users, and one for nonusers. The SmarTraveler usage rate is modeled as a function of payment method and pricing, travelers' travel and socioeconomic characteristics, and their attitudes and perceptions toward ATIS. The data used in model estimation included willingness-to-pay scenarios involving two methods of payment: a flat monthly fee, and a charge per call. It was found that for nonusers, the higher the expected benefit from an ATIS, the higher the willingness to pay. This expected benefit is a latent variable indicated via the importance placed by individuals on ATIS attributes such as reliability, relevance, and coverage. For users, the utility of SmarTraveler is affected strongly by the users' level of satisfaction with the service. A modeling framework is developed that captures response biases and presents figures on willingness to pay for an innovative ATIS actually implemented in the market.