Modeling and Forecasting the Evolution of Preferences over Time: A Hidden Markov Model of Travel Behavior

Abstract: Literature suggests that preferences, as denoted by taste parameters and consideration sets, may evolve over time in response to changes in demographic and situational variables, psychological, sociological and biological constructs, and available alternatives and their attributes. However, existing representations typically overlook the influence of past experiences on present preferences. This study develops, applies and tests a hidden Markov model with a discrete choice kernel to model and forecast the evolution of individual preferences and behaviors over long-range forecasting horizons. The hidden states denote different preferences i.e. modes considered in the choice set, and sensitivity to level-of-service attributes. The evolutionary path of those hidden states is hypothesized to be a first-order Markov process. The framework is applied to study the evolution of travel mode preferences, or modality styles, over time, in response to a major change in the public transportation system. We use longitudinal travel diary from Santiago, Chile. The dataset consists of four one-week pseudo travel diaries collected before and after the introduction of Transantiago, a complete redesign of the public transportation system in the city. Our model identifies four modality styles in the population: drivers, bus users, bus-metro users, and auto-metro users. The modality styles differ in terms of the travel modes that they consider and their sensitivity to level-of-service attributes. At the population level, there are significant shifts in the distribution of individuals across modality styles before and after the change in the system, but the distribution is relatively stable in the periods after the change. Finally, a comparison between the proposed dynamic framework and comparable static frameworks reveals differences in aggregate forecasts for different policy scenarios.