Abstract
By applying a distinct new framework for travel-demand analysis that is based on utility maximization subject to time and money constraints, systems of demand equations are estimated for the underlying determinant of travel demand: out-of-home activity participation. The system of demand equations is derived from a flexible, indirect utility function. For consistency with short-period behavioral observations, the accompanying stochastic specification allows for cardinally ordered integer observations with correlated unobserved heterogeneity. Using 1990 Bay Area Travel Survey data, the parameter estimates of two such specifications are extended to produce estimates of various economic implications, such as values of time and demand elasticities. Several hypotheses regarding travel behavior—including the constancy of travel-time budgets and total activity-participation rates—and the welfare effects generated by changes in the travel environment are also examined.
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