Institute of Transportation, MOTC

       In recent years, Taiwan Railways has actively improved the service level of trains. It has successively purchased Taroko and Puyuma in order to solve traffic problems in Eastern Route. During peak hours, it is difficult to obtain tickets and due to the simplified policy of vehicle types, which makes the problem worse. The pricing should be based on the service level and Passengers’ willingness to pay for improving the efficiency of resource allocation. However, there’s few literature discuss about this issue. This study designed preference questionnaire to analyze passengers' preference of train type, service level and willingness to pay for ticket. Multinomial logit model is estimated. This study also applies Latent Class logit model to analyze the heterogeneity of passengers. Furthermore, we estimated the passengers’ willingness to pay for Puyuma, Taroko and Tze-Chiang by Contingent valuation method. At last, compared the price gap by three model’s result. Discrete choice model’s results show that refundable tickets and exchangeable tickets are key factors for passengers, and compare with short and medium, long-term passengers care more about travel time. In latent class logit model, one of the two groups comprises passengers with income, age and business trip. For passengers with lower income, age between 18 to 24 and over 65, not business trip taking fare-related variables important, while higher income, age between 25 to 64, business trip considering about time-related variables. The standard deviation of the tri-bounded dichotomous choice model is smaller than that of the double bounded dichotomous choice model because of frequency on inquiry. The evaluation results of three model’s show that the passenger’s willingness-to-pay difference obtained by directly asking or make the preference by choice between attributes. This study combines different train types with service attributes, such as under different travel times and ticket refund mechanisms. It can be used as a reference for Taiwan Railways' future adjustment of pricing strategy optimization and revenue management.