A COVARIANCE HETEROGENEITY GENERALIZED NESTED LOGIT MODEL OF NEW BUS SERVICES

This research attempts to investigate long distance travelers' preferences for new bus services in which buses are equipped with seats or sleepers on the lower deck. The stated preference survey instrument includes alternative scenarios of bus fares and service frequency for two hypothetical bus classes. This paper adopts the generalized nested logit (GNL) model with covariance heterogeneity (COVGNL) to take account of flexible substitution patterns among alternatives and to allow heterogeneity across individuals in the covariance among nested alternatives. The estimation results indicate that travel cost, individual and trip characteristics, and quality-of-service are important factors affecting the choices of travel modes and bus service classes. The preferred GNL model includes two multiple alternative nests - the lower deck sleeper and seat in a nest and the lower deck sleeper and upper deck seat in a nest. The COVGNL model statistically rejects the multinomial logit, nested logit, and GNL models and indicates a significant difference in the correlation between the utilities of nested alternatives across individuals with different income earnings and gender. The empirical findings provide valuable insights for the proposed new bus services.