The LDV Intangible Cost Calculator for light-duty vehicles enables IAM groups to more realistically represent technology choice decisions in the transport sector.
‘Intangible costs’ are related to those aspects of consumer decision making which are not captured by pure techno-economics (e.g., capital, O&M, and fuel costs). They represent additional sources of utility or disutility contributing to consumers’ perceptions of beneficial or costly choice outcomes. Importantly, intangible costs, or non-financial preferences as they are also known, for a given vehicle technology may differ widely among heterogeneous groups of consumers in different countries. In the realm of vehicle choice, these non-financial attributes include vehicle novelty, range, and refueling availability, among others. Using the LDV Intangible Cost Calculator developed in ADVANCE, consumers' unique preferences for these attributes are monetized. The costs and benefits can then be included alongside pure financial costs as extra parameters in IAM equations determining vehicle choice. The intangible costs are derived from a detailed, multinomial logic transport sector model (MA3T). This approach allows consumer heterogeneity and non-financial preferences to be linked to (or derived from) specific IAM scenarios so that narrative storylines, model set-up, and model assumptions are all consistent.
Input data and code
Description: The data set and equations are differentiated by consumer type, by vehicle technology, and by region.
Consumers (potential vehicle buyers) within one of the respective IAM’s native model regions are divided along three separate dimensions. The combinations possible in this 3x3x3 arrangement lead to 27 unique consumer groups in total.
- Settlement pattern: Urban – Suburban – Rural
- Attitude toward technology adoption: Early Adopter – Early Majority – Late Majority
- Vehicle usage intensity: Modest Driver – Average Driver – Frequent Driver
Five non-financial vehicle purchase attributes are considered for implementation in the IAMs.
- Range anxiety (limited electric vehicle driving range)
- Refueling station availability, or lack thereof (for non-electric vehicles)
- Risk premium (attitude toward new technologies)
- Model variety/availability (diversity of vehicles on offer)
- Electric vehicle charger installation (home/work/public)
While the detailed transport model MA3T was originally developed for studying the USA light-duty vehicle market, our analysis in ADVANCE showed that the intangible costs generated by the model for the USA can be extended to other countries and regions by applying simple “regional multipliers”, which are tied to selected predictor variables that are globally available. In total, data and relationships are available for 26 different regions/countries.
How to use the module
To use the LDV Intangible Cost Calculator, the user may input assumptions into the highlighted cells of the “user_input” sheet. Time-series for intangible costs are then calculated for different vehicle technologies on each of the consumer group-specific sheets (e.g., ‘rueaa’). Values for each of the five non-financial vehicle purchase attributes are given explicitly in the sheets, as well as a total summed value. The “Instructions” sheet in the LDV Intangible Cost Calculator gives more specific instructions.
- McCollum, D.L., C. Wilson, H. Pettifor, K. Ramea, V. Krey, K. Riahi, C. Bertram, Z. Lin, Z., O.Y. Edelenbosch, and S. Fujisawa, 2016, “Improving the behavioral realism of global integrated assessment models: An application to consumers’ vehicle choices,” Transportation Research Part D: Transport and Environment, DOI: 10.1016/j.trd.2016.04.003.
- McCollum, D.L. et al. “Modeling Consumer Preferences for Alternative Fuel Vehicles in Global Integrated Assessment Models” (in preparation; summarizes results of a model inter-comparison exercise)