INTRODUCING THE EXPENDITURE RATE IN THE ESTIMATION OF MODE CHOICE MODELS

This article discusses the specification of mode choice models for analysis of travel demand. Relaxing the assumption on working hours flexibility originates a new specification of modal utility in choice models, where the usual wage rate is replaced by an expenditure rate. Here, this reformulation is subject to an empirical scrutiny using data on work trips from two corridors with fairly different income distribution in Santiago, Chile. Results show that the expenditure rate models completely dominate the wage rate specification, both in statistical and economic interpretation; the expenditure rate model with per capita family income was systematically the best in performance. This indicates that income should not be treated as a proxy for wage rate or taste, but as (exogenous) purchasing power, which suggests the presence of income effect.