Second Best Choice: Aggregate (Market Share) Models

Aggregate market share models express the market share of a mode/vehicle as a function of variables such as commodity type, and the characteristics of the competing mode/vehicles (e.g., time, cost). These models were the first econometric models used to model freight mode/vehicle choice in the 1960s and 1970s, when large-scale freight origin-destination surveys were routinely conducted. However, because of their aggregate nature, these models cannot consider the role played by attributes such as shipment size, and other shipment-level or establishment-level factors that influence mode/vehicle choice. Thus, these models are less able to capture the key dynamics that influence mode/vehicle choice, and are much less sensitive to policy variables. Also, collecting the data needed to calibrate these models is not a trivial endeavor, as doing so typically requires large- scale freight surveys. Without access to large-scale data, the estimation of aggregate market share models is bound to be expensive given the required data collection effort.

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