Transit Market Research Using Attitudinal Market Segmentation, Structural Equation Modeling and Mode Choice Modeling

Yoram Shiftan, The TechnionYoram Shiftan, The TechnionMaren Outwater, Cambridge SystematicsMaren Outwater, Cambridge SystematicsYuShuang Zhou, Cambridge SystematicsYuShuang Zhou, Cambridge Systematics

55thth Israeli-British/Irish Workshop in Regional Science Israeli-British/Irish Workshop in Regional ScienceRamat Gan, April 2007Ramat Gan, April 2007

What kinds of strategies can best seize these opportunities?Strategies

Building a Competitive StrategyBuilding a Competitive Strategy

Which segments in which travel markets should transit services compete for?

Competitive Positioning

What will be the likely funding and cooperation?Resources

What are the key attitudes and preferences that drive traveler choices?

Travel Behavior

What are the market segments and where are they What are the market segments and where are they located?located?

Market Segments

From Market Research to Service PlanningFrom Market Research to Service Planning

Segment Segment MarketMarket

Locate Market Locate Market SegmentsSegments

Competitive Competitive PositioningPositioning

CustomerCustomerExperienceExperience

SystemSystemPerformancePerformance

NetworkNetworkStructureStructure

Service Service PlanningPlanning

Transit Transit PriorityPriority

PersonalPersonalSafetySafety

SeatingSeatingComfortComfort

Understand Understand Travel MarketsTravel Markets

Attitude-BasedAttitude-BasedSurveySurvey

Exploratory Exploratory Factor AnalysisFactor Analysis

Confirmatory Confirmatory Factor AnalysisFactor Analysis

Market SegmentationMarket Segmentation

Market Segmentation Market Segmentation ApplicationApplication

Structural EquationStructural Equation ModelingModeling

Market Research Analysis Flow ChartMarket Research Analysis Flow Chart

Mode ChoiceMode Choice(WTA)(WTA)

Stated-PreferenceStated-PreferenceSurvey (WTA)Survey (WTA)

Attitude-Based Survey Results (UTA)Attitude-Based Survey Results (UTA)T

OP

TE

N

10. Feel savfe using PT10. Feel savfe using PT 7.37.3

9. Important to change travel plans at a moment9. Important to change travel plans at a moment 7.57.5

8. Feel safe near home or destianton8. Feel safe near home or destianton 7.57.5

7. Like to know the cause of delay7. Like to know the cause of delay 7.67.6

6. It is imptant to have comfortable seats6. It is imptant to have comfortable seats 7.77.7

5. Prefer travel options with predicted time5. Prefer travel options with predicted time 7.87.8

4. Like to keep to my schedule when travel4. Like to keep to my schedule when travel 8.08.0

3. Clean vehicle is important3. Clean vehicle is important 8.48.4

2. Public transportation help the environment2. Public transportation help the environment 8.58.5

1. Driving is the fastest way1. Driving is the fastest way 9.09.0

BO

TT

OM

TE

N

2. Need to make trips to various locations2. Need to make trips to various locations 5.15.1

3. Don't mind transfers3. Don't mind transfers 4.94.9

4. Avoid some areas that are unsafe4. Avoid some areas that are unsafe 4.84.8

5. Prefer driving to be alone5. Prefer driving to be alone 4.74.7

6. Travel mostly during peak time6. Travel mostly during peak time 4.44.4

8, Driving should pay more to help Envirenment8, Driving should pay more to help Envirenment 4.14.1

9. Use Public transportation if it was cheaper9. Use Public transportation if it was cheaper 4.04.0

10. I am usually anxious when travel10. I am usually anxious when travel 3.13.1

3

4

5

6

7

8

9

10

Sco

re

Attitudinal Statements

1. Avoid traveling at stressful time1. Avoid traveling at stressful time 5.15.1

7. Worry about getting into an accident7. Worry about getting into an accident 4.14.1

UTA - 38 StatementsWTA - 30 Statements

Need for Fixed Schedule

Confirmatory Factor Analysis (UTA)Confirmatory Factor Analysis (UTA)

Sensitivity to Time

Willingness to Use Transit

Sensitivity to Stress and Comfort

Desire to Help the Environment

Desire for Productivity and Reliability

Sensitivity to Safety and Privacy

Desire to Help the EnvironmentDesire to Help the Environment

I would be willing to pay more when I travel if it would I would be willing to pay more when I travel if it would help improve air qualityhelp improve air quality

• People who drive alone should pay more to help People who drive alone should pay more to help improve air quality (.89)improve air quality (.89)

• I would switch to a different form of transportation if I would switch to a different form of transportation if it would reduce air pollution (.86)it would reduce air pollution (.86)

• Use of public transportation can help improve air Use of public transportation can help improve air quality (.28)quality (.28)

Desire for Productivity and ReliabilityDesire for Productivity and Reliability

I would like to make productive use of my time when I travelI would like to make productive use of my time when I travel

• I would much rather do something else with the time that I I would much rather do something else with the time that I spend travelingspend traveling (.82%)(.82%)

• I prefer a travel option that has predictable travel time from I prefer a travel option that has predictable travel time from day to day (.73%)day to day (.73%)

• If my travel option is delayed, I want to know the cause and If my travel option is delayed, I want to know the cause and length of the delay (.68%)length of the delay (.68%)

• When traveling, I like to keep as close as possible to my When traveling, I like to keep as close as possible to my departure and arrival schedulesdeparture and arrival schedules (.68%)(.68%)

Sensitivity to TimeSensitivity to Time

I am usually in a hurry when I make a tripI am usually in a hurry when I make a trip

• I would change my form of travel if it would save me some I would change my form of travel if it would save me some time (.93%)time (.93%)

• I use the fastest form of transportation regardless of cost I use the fastest form of transportation regardless of cost (.85)(.85)

• Driving is usually the fastest way to get where I need to go Driving is usually the fastest way to get where I need to go (.52)(.52)

Sensitivity to Safety and PrivacySensitivity to Safety and Privacy

I do mind traveling with strangersI do mind traveling with strangers

• I do not feel safe using public transportation (.85)I do not feel safe using public transportation (.85)

• Having my privacy is important to me when I travel (.61)Having my privacy is important to me when I travel (.61)

• I prefer driving because I like to be alone while I travelI prefer driving because I like to be alone while I travel(.56)(.56)

• I do not feel safe walking both near my home and near my I do not feel safe walking both near my home and near my destination (.55)destination (.55)

• I avoid traveling through certain areas because they are I avoid traveling through certain areas because they are unsafe (.51)unsafe (.51)

• When traveling, I do not like to talk and visit with other When traveling, I do not like to talk and visit with other people (.26)people (.26)

• I worry about getting in an accident when I travel (.21)I worry about getting in an accident when I travel (.21)

Need for Fixed ScheduleNeed for Fixed Schedule

I need to travel mostly during rush hour timesI need to travel mostly during rush hour times

• I need to make trips according to a fixed schedule (89%)I need to make trips according to a fixed schedule (89%)

Sensitivity to Stress and ComfortSensitivity to Stress and Comfort

Having a stress-free trip is more important than reaching my Having a stress-free trip is more important than reaching my destination quicklydestination quickly

• I avoid traveling at certain times because it is too stressful I avoid traveling at certain times because it is too stressful (73%)(73%)

• I don’t mind delays as long as I am comfortable (64%)I don’t mind delays as long as I am comfortable (64%)

• It is important to have comfortable seats when I travelIt is important to have comfortable seats when I travel(26%)(26%)

• A clean vehicle is important to me (18%)A clean vehicle is important to me (18%)

Willingness to Use TransitWillingness to Use Transit

I wouldn’t mind walking a few minutes to get to and from a bus or I wouldn’t mind walking a few minutes to get to and from a bus or a TRAX stopa TRAX stop

• I would ride transit if services were available to my I would ride transit if services were available to my destination when I need to travel (88%)destination when I need to travel (88%)

• If I rode public transportation I wouldn’t mind changing If I rode public transportation I wouldn’t mind changing between buses or between bus and TRAX (78%)between buses or between bus and TRAX (78%)

• I know how to reach my destination using public I know how to reach my destination using public transportation (64%)transportation (64%)

• I would use public transportation more often if it was cheaper I would use public transportation more often if it was cheaper to ride (36%)to ride (36%)

Sensitivity to Personal Sensitivity to Personal Travel ExperienceTravel Experience

Need for FlexibilityNeed for Flexibility

Attitude Factors (the WTA case)Attitude Factors (the WTA case)

Insensitivity to Insensitivity to Transport CostsTransport Costs

Sensitivity Sensitivity to Stressto Stress

Desire to Help the Desire to Help the EnvironmentEnvironment

Need for Time Need for Time SavingsSavings

Structural Equation Modeling (UTA) Structural Equation Modeling (UTA)

Attitudinal Statements

(Endogenous)

Socioeconomic Status

(Exogenous)

Travel Behaviors

Environment.

Productivity &Reliabiity

Sensitivity toTime

Privacy &Safety

Fixed Schedule

Stress & Comfort

Willingness to Use transit

Attitudinal Factors(Latent)

Q38

EQ38

Q37

Q3

Q2

Q1

EQ37

EQ3

EQ2

EQ1

EV38

EV37

EV3

EV2

EV1

V28

V27

V3

V2

V1

Goals of Market SegmentationGoals of Market Segmentation

Between SegmentsBetween Segments

The differences among The differences among segments segments

are are maximizedmaximized

WithinWithin Each SegmentsEach Segments

The differences within The differences within each segment are each segment are

minimizedminimized

to produce distinct groups (i.e., segments) with maximized difference between to produce distinct groups (i.e., segments) with maximized difference between groups and minimized difference groups and minimized difference within each groupwithin each group

Flexible Schedule

Fixed Schedule

Need for Fixed Schedule

Flexible Schedule

FixedSchedule

No Transit TransitWillingness to Use Transit No Transit Transit No Transit Transit No Transit Transit

MarketSegments

Attitudinal Focus

AnxiousAmblers

None ofThese

Factors

Sensitivity to Time Low Sensitivity of Time High Sensitivity of Time

All Travelers

Transit

Green Riders

Fixed Schedule

Productive9 to 5-ers

Fixed Schedule and

Transit

Routine Riders

Time

Cautious Flyers

Timeand Fixed Schedule

Cautious9 to 5-ers

Time, Fixed Schedule and

Transit

RoutineFlyers

Timeand Transit

Green Flyers

Market Segmentation (UTA)Market Segmentation (UTA)

Cautious FlyersCautious Flyers

Low desire to improve air qualityLow desire to improve air quality

Lowest willingness to use transitLowest willingness to use transit

High desire for productivity, high sensitivity to safety and privacy, and High desire for productivity, high sensitivity to safety and privacy, and low sensitivity to stress and comfort.low sensitivity to stress and comfort.

Flexible schedule, yet high sensitivity to time.Flexible schedule, yet high sensitivity to time.

The majority of this segment is young married female with kids, most of The majority of this segment is young married female with kids, most of them are in one-worker and two-vehicle household.them are in one-worker and two-vehicle household.

More than 75% of this segment are homemakers and students.More than 75% of this segment are homemakers and students.

Only 35% of the population in this segment need to travel more than 0.5 Only 35% of the population in this segment need to travel more than 0.5 mile to work, nobody uses transit as the primary mode for either work or mile to work, nobody uses transit as the primary mode for either work or other trips.other trips.

Green RidersGreen Riders

High desire to improve air qualityHigh desire to improve air quality

Segment with highest willingness to use transitSegment with highest willingness to use transit

Low desire for productivity and reliability, low sensitivity to time, and Low desire for productivity and reliability, low sensitivity to time, and very flexible schedule.very flexible schedule.

Least sensitive segment to safety and privacy, but highly sensitive to Least sensitive segment to safety and privacy, but highly sensitive to stress and comfort.stress and comfort.

High share of retired population (50%) and of students (5%)High share of retired population (50%) and of students (5%)

All households own vehicles, most of them own one.All households own vehicles, most of them own one.

25% of this segment needs to travel more than 0.5 mile to work/school, 25% of this segment needs to travel more than 0.5 mile to work/school, 6% use transit as the primary mode for work/school trips, and 15% use 6% use transit as the primary mode for work/school trips, and 15% use transit for non-work tripstransit for non-work trips

Number of Workers in the HouseholdNumber of Workers in the Household

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 >=3

Anxious Amblers

Green Riders

Productive9 to 5-ers

Routine Riders

CautiousFlyers

Green Flyers

Cautious 9 to 5-ers

Routine Flyers

People Who Travel More Than ½ Mile For People Who Travel More Than ½ Mile For Work and School TripsWork and School Trips

GreenFlyers

Productive9 to 5-ers

91%91%

Routine Riders

85%85%

Green Riders

26%26%

Cautious9 to 5-ers

90%90%

RoutineFlyers

87%87%

Cautious Flyers

AnxiousAmblers

7%7%

35%35%

44%44%

PercentPercent

00

1515

3030

4545

6060

7575

9090

11%11%

0%0%6%6%

9%9%13%13%

1%1%6%6%

0.0%0.0%

Share using public transit for work/school trips Share using public transit for work/school trips

Market SegmentationMarket SegmentationCompetitive PositioningCompetitive Positioning

Tough but PossibleRelatively Low-Hanging Fruit

Toughest MarketsTougher Markets

Des

ire

for

Saf

ety

and

Pri

vacy

an

d C

om

fort

Lo

wH

igh

Low High

Value of Time

GreenFlyers

2%2%

Market SegmentsMarket Segments

Productive9 to 5-ers

4%4%

Routine Riders

9%9%

Green Riders

7%7%

Cautious9 to 5-ers

20%20%

RoutineFlyers

33%33%

Cautious Flyers

4%4%

AnxiousAmblers

21%21%

Per

cen

tP

erce

nt

00

55

1010

1515

2020

2525

3030

Geogarphic Details of Geogarphic Details of Market SegmentsMarket Segments

One of two PUMA in One of two PUMA in Salt Lake CountySalt Lake County

Census TractsCensus Tracts

Block GroupsBlock Groups

JoeJoeSix-PackSix-Pack

None ofNone ofTheseThese

FactorsFactors

MarketMarketSegmentSegment

FocusFocus

AnxiousAnxiousAmblerAmbler

StressStress

Calm Calm ChargerCharger

TimeTime

FrazzledFrazzledFlyerFlyer

Time andTime andStressStress

EnvironmentEnvironment

GreenGreenCruiserCruiser

ReservedReservedRecyclerRecycler

EnvironmentEnvironmentand Stressand Stress

RelaxedRelaxedRunaboutRunabout

EnvironmentEnvironmentand Timeand Time

TenseTenseTrekkerTrekker

Environment,Environment,Time, andTime, and

StressStress

Modest EnvironmentalModest EnvironmentalFactor Factor OneOne

Strong EnvironmentalStrong Environmental

All Trans-BayAll Trans-Bay

TrippersTrippers

Market Segmentation (WTA)Market Segmentation (WTA)

Factor Factor FourFour

LessLessStressedStressed

MoreMoreStressedStressed

LessLessStressedStressed

MoreMoreStressedStressed

LessLessStressedStressed

MoreMoreStressedStressed

LessLessStressedStressed

MoreMoreStressedStressed

Factor Factor TwoTwo

Less TimeLess TimeSavings Savings

More Time More Time SavingsSavings

Less TimeLess TimeSavings Savings

More TimeMore TimeSavingsSavings

WTA Mode Choice ModelWTA Mode Choice ModelConstantsConstants ModesModes HBWHBW HBO/ShopHBO/Shop HBRecHBRecCarpoolCarpool AutoAuto -0.21-0.21 -0.33-0.33 -1.44**-1.44**BARTBART TransitTransit 1.86**1.86** 1.32*1.32* 2.17**2.17**Other railOther rail TransitTransit 0.590.59 0.640.64 1.511.51BusBus TransitTransit 0.96*0.96* -0.11-0.11 1.271.27FerryFerry TransitTransit 0.0180.018 0.240.24 -0.65-0.65Drive accessDrive access TransitTransit -1.68**-1.68** -1.44**-1.44** 0.0150.015Transit access/egressTransit access/egress TransitTransit -068**-068** -0.29-0.29 -0.55*-0.55*LOSLOSTotal costTotal cost Rail/busRail/bus -0.0038**-0.0038** -0.0027**-0.0027** -0.0063**-0.0063**

FerryFerry -0.0032**-0.0032** -0.0013-0.0013 -0.0026*-0.0026*AutoAuto -0.0013**-0.0013** -0.0007**-0.0007** -0.0015**-0.0015**

In vehicle timeIn vehicle time AutoAuto -0.037**-0.037** -0.025**-0.025** -0.046**-0.046**Rail/busRail/bus -0.023**-0.023** -0.016**-0.016** -0.039**-0.039**FerryFerry -0.024**-0.024** -0.017**-0.017** -0.029**-0.029**

Walk timeWalk time TransitTransit -0.030**-0.030** -0.023**-0.023** -0.028**-0.028**Walk access/egress timeWalk access/egress time TransitTransit -0.060-0.060 -0.048**-0.048** -0.062**-0.062**Drive access time Drive access time TransitTransit -0.108**-0.108** -0.069**-0.069** -0.061**-0.061**Out of vehicle timeOut of vehicle time AutoAuto -0.043**-0.043** -0.039-0.039 -0.025-0.025Total travel timeTotal travel time Time sensitive MSTime sensitive MS -0.0078**-0.0078** -0.0094**-0.0094** -0.0056-0.0056

WTA Mode Choice Model - ContinueWTA Mode Choice Model - ContinueSocioeconomicSocioeconomic ModesModes HBWHBW HBO/ShopHBO/Shop HBRecHBRecHousehold incomeHousehold income Drive aloneDrive alone 4.4E-6*4.4E-6* -9.2E-7-9.2E-7 -6.9E-6**-6.9E-6**

Rail/bus drive accessRail/bus drive access 7.1E-6**7.1E-6** 7.1E-6* 7.1E-6* -1.7**-1.7**Ferry drive accessFerry drive access 1.5E-5**1.5E-5** -2.1E-6-2.1E-6 -1.2E-5**-1.2E-5**Rail/bus transit accessRail/bus transit access -2.1E-7-2.1E-7 -5.3E-7-5.3E-7 -2.4E-5**-2.4E-5**Ferry walk/tran accessFerry walk/tran access 7.4E-67.4E-6 1.2E-5**1.2E-5** -1.5E-5**-1.5E-5**

Vehicle per householdVehicle per household Drive aloneDrive alone 0.136*0.136* 0.419**0.419** 0.0700.070Rail/bus walk/tran accssRail/bus walk/tran accss -o.604**-o.604** -0.346*-0.346* 0.0180.018Ferry walk/transit accessFerry walk/transit access -0.496**-0.496** -0.128-0.128 -0.083-0.083Rail/bus drive accessRail/bus drive access 0.0260.026 0.306**0.306** 0.1000.100Ferry drive accessFerry drive access -0.281**-0.281** 0.416**0.416** -0.263-0.263

Additional ConstantsAdditional Constants Market SegmentsMarket SegmentsAuto modesAuto modes Stress-related MSStress-related MS -0.0031-0.0031 1.067**1.067** 0.574**0.574**Ferry modesFerry modes Stress-related MSStress-related MS 0.1250.125 0.757**0.757** ----Carpool transit ferryCarpool transit ferry Pro-environment MSPro-environment MS -- -- ---- 0.720**0.720**Summary statisticsSummary statisticsFinal log likelihoodFinal log likelihood -1754.50-1754.50 -1115.58-1115.58 -780.32-780.32Rho-Square wrt zeroRho-Square wrt zero 0.3280.328 0.3930.393 0.4580.458Rho-Square wrt cons.Rho-Square wrt cons. 0.1190.119 0.0930.093 0.1110.111Auto VOTAuto VOT $17.07$17.07 $21.34$21.34 $18.47$18.47Bus/Rail VOTBus/Rail VOT $3.65$3.65 $3.49$3.49 $3.70$3.70Ferry VOTFerry VOT $4.60$4.60 $8.14$8.14 $6.82$6.82

ConlusionsConlusions To increase transit market share we need to understand the market To increase transit market share we need to understand the market

place according to the key attitudes potential customers most place according to the key attitudes potential customers most value.value.

Structural Equation Modeling is a powerful tool to improve our Structural Equation Modeling is a powerful tool to improve our understanding of travel behavior and to improve transit services.understanding of travel behavior and to improve transit services.

This approach can significantly increase out ability to answer This approach can significantly increase out ability to answer important questions for better transit planning such as:important questions for better transit planning such as:

• What attitudes and preferences drive each market segment’s What attitudes and preferences drive each market segment’s choice for local travel options?choice for local travel options?

• What strategies would be most effective for each market What strategies would be most effective for each market segment?segment?

• What are the “easy-to-reach” (and “hard to reach”) markets?What are the “easy-to-reach” (and “hard to reach”) markets?

• What strategies are most likely to be effective in different What strategies are most likely to be effective in different locations?locations?

For ExampleFor Example

Market segments with a Market segments with a high value of timehigh value of time and and a high need for a high need for safetysafety and privacyand privacy (such as Cautious 9 to 5-ers in the UTA study) (such as Cautious 9 to 5-ers in the UTA study) are are more difficult to servemore difficult to serve with fixed-route transit systems. with fixed-route transit systems.

Market segments with Market segments with a low value of timea low value of time and and low need to privacylow need to privacy (such as Green Riders in the UTA Study) are (such as Green Riders in the UTA Study) are more likely servedmore likely served by by models improvements to existing transit services.models improvements to existing transit services.

Thank you for your attention!Thank you for your attention!

Anxious AmblersAnxious Amblers Low desire to help the environmentLow desire to help the environment

Low willingness to use transitLow willingness to use transit

Low desire for productivity and reliabilityLow desire for productivity and reliability

Low sensitivity to time and flexible scheduleLow sensitivity to time and flexible schedule

High sensitivity to safety and privacyHigh sensitivity to safety and privacy

Most sensitive segment to stress and comfortMost sensitive segment to stress and comfort

High concentration of old retire female populationHigh concentration of old retire female population

Low to middle income level (up to $100,000)Low to middle income level (up to $100,000)

Only 7% of this segment needs to travel more than 0.5 mile to work, and Only 7% of this segment needs to travel more than 0.5 mile to work, and nobody uses transit as the primary mode for work trips. Only 4% use transit nobody uses transit as the primary mode for work trips. Only 4% use transit for non-work trips.for non-work trips.

Green FlyersGreen Flyers

Highest desire to help the environment, and high willingness to Highest desire to help the environment, and high willingness to use transit.use transit.

High sensitivity to time, but low desire for productivity and High sensitivity to time, but low desire for productivity and reliability, flexible schedule, low sensitivity to safety and reliability, flexible schedule, low sensitivity to safety and privacy, and low sensitivity to stress and comfort.privacy, and low sensitivity to stress and comfort.

Most of the people in this segment are young and middle aged, Most of the people in this segment are young and middle aged, employed, and from a one worker household.employed, and from a one worker household.

More than half of this segment have an income below $50,000.More than half of this segment have an income below $50,000.

Only 44% of this segment need to travel more than 0.5 mile to Only 44% of this segment need to travel more than 0.5 mile to work/school, 11% of them use transit as primary mode for work/school, 11% of them use transit as primary mode for commute, and 22% uses transit for non-work trips.commute, and 22% uses transit for non-work trips.

Mode Share for Work/School TripsMode Share for Work/School Trips

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AnxiousAmblers

GreenRiders

Productive9 to 5-ers

RoutineRiders

Cautiousflyers

GreenFlyers

Cautious 9to 5-ers

RoutineFlyers

Within 1/2 mile travel Transit Driving alone/carpool Other Modes