Uncovering the link between intra-individual heterogeneity and variety seeking: the case of new shared mobility

Abstract

Preferences can vary both across respondents (i.e. inter-respondent preference heterogeneity) and across choice tasks within respondents (i.e. intra-respondent preference heterogeneity). Ignoring the existence of intra-respondent preference heterogeneity could bias preference elicitation and demand forecast. Thus far, most studies covering inter- and intra-respondent preference heterogeneity have applied the mixed multinomial logit model. Meanwhile, the behavioural explanations for such preference variations remain under-explored. This paper accommodates inter- and intra-respondent preference heterogeneity through a two-layer latent class modelling structure, where the continuous random distributions are replaced with discrete mixtures in both layers. A latent variable representing variety-seeking is included to explain class membership probabilities, offering additional behavioural insights concerning the source of preference heterogeneity both across and within respondents. Two aspects associated with variety-seeking are examined: novelty-seeking (i.e. the inclination to adopt new modes) and alternation (i.e. the tendency to vary one’s behaviour regularly by selecting different modes continuously). In the context of new shared mobility, this paper finds the role of both aspects in preference heterogeneity. Specifically, novelty seekers are found to be more likely to fall into the class with higher probabilities of switching from existing modes to the new air taxi service than novelty avoiders, and alternation seekers are more likely to belong to the class with higher probabilities to exhibit intra-respondent preference heterogeneity than alternation avoiders. This paper, therefore, provides empirical evidence to identify the target customers of the new air taxi service.