Freeway drivers' willingness to pay for an on board unit under an electronic toll collection system

Abstract

Electronic toll collection (ETC) systems have been put into practice in one or two channels at toll plazas on Taiwan's freeways since 2006. The utilisation of the ETC system has been flat due to the extra cost of installing the on board unit (OBU) that is used in the system. To increase the utilisation rate of the ETC system, it is crucial to understand the real price that drivers are willing to pay. Therefore, this study investigates freeway drivers' willingness to pay a value for an OBU. A stated preference experiment is designed to obtain the willingness to pay at three different levels of use. To avoid the estimation bias due to a large percentage with a zero willingness to pay, a spike model is used. Different markets are segmented to examine their willingness to pay for an OBU. The estimation results show that the willingness to pay for an OBU is NT$727/unit(1) for short distance drivers, NT$830 for medium distance drivers, and NT$1308/unit for long distance drivers. (C) 2012 Elsevier Ltd. All rights reserved.