Which Is the Biggest Carrot? Comparing Nontraditional Incentives for Demand Management

While congestion charging has been heavily studied, relatively little literature focus on incentives and none is comparing different incentivization schemes. This paper investigates the impact of providing incentives on travelers' choices for their commute to work. In contrast to road pricing, an approach of offering incentives to decongest is gaining interest with field tests in Europe, India, the US and Singapore. Many forms of incentives exist and the objective of this study is to analyze the potential of a variety of incentive schemes including offering monetary rewards such as cash, credit towards Apple Store, donations, lottery, or in-kind rewards such as HOV pass, guaranteed parking, free coffee or privileged status. This study analyzes the results of a stated-preference survey conducted in the San Francisco Bay Area. In this survey the participants were presented with hypothetical scenarios where they could change their commute for an incentivized alternative. A nested-logit model was estimated from the SP survey and forecasts were made using the 2000 Bay Area Travel Survey. We found that our subjects are willing to change their commute, exhibiting a range of willingness to be paid $6.95-$18.98 per hour of travel time or $10.60-$28.93 per hour of schedule delay. Apple credit and cash proved to be the more efficient monetary rewards while HOV pass was value at $10.85 by the participants. As predicted by behavioral economics, travelers are much more sensitive to charges than to rewards. While application of the model within a traffic simulator is outside of the scope of this study, more limited forecast explore the direct demand response. Illustrative forecasts show that the main contribution to a shift outside the peak hour relies in an earlier departure time and the use of an alternative road or that the use of incentives to shift people follows a law of increasing returns.