ANALYSIS OF THE EFFECTS OF CAPTIVITY ON TRAVEL TIME AND COST ELASTICITIES

Our theoretical and empirical analyses have shown that the biases introduced into parameter estimation and model forecasts by ignoring the existence of captivity (and more generally, that of choice set generation) can be significant. The implication of our work for transport analysts is that decisions based on demand estimates that do not consider captivity potentially result in misallocation of scarce resources. Though our empirical work is conducted with the choice of mode to work in a developing country, the implications drawn should be extensible to other choice dimensions and locations.