Applicability of an Extended Prospect Theory to Travel Behaviour Research: A Meta‐Analysis

Abstract

In transport research, choice behaviour is commonly investigated by using discrete choice models that comply with the utility theory (UT) paradigm. The objective of this article is to assess the extent to which the assumptions of an extended version of prospect theory (PT) allow for a better description of travellers’ choice behaviour than UT. To that aim the travel behaviour literature was reviewed for information about observed choice behaviour suitable for such a comparison. The review yielded 106 studies that covered almost the whole range of domains and contexts of travel behaviour. Compared to the corresponding assumptions of UT, a meta‐analysis showed a better descriptive performance of reference‐dependent framing connected with loss‐aversive valuation, and of interpersonal heterogeneity in choice behaviour strategies. Diminishing sensitivity approached the observed behaviour better than the sign‐independent utility function of UT in several studies where a comparison was feasible. In choice under risk or uncertainty, the non‐linear weighting of probabilities in connection with loss aversion appeared to offer a better description than expected UT. It is concluded that the joint application of the assumptions of an extended PT might provide a better understanding of human choice behaviour over the whole range of travel‐related contexts.