Questions 1. Based on the information in Table 1, compute the probabilities that an individual belonging to each segment will choose auto for a work trip. (4 points) 2. In order to increase transit ridership, the local transport authority is considering the following options: a. Reducing the fare by 50 cents for both segments; b. Doubling the number of buses on each route (which would halve the headways); c. Doubling parking costs For each population segment, how will each of these strategies affect transit ridership, and which option will be most effective in increasing ridership? (8 points) 3. What monetary value of bus travel time, measured in dollars per hour, is implied by the coefficients of this model? (3 points)1. Mode Choice Analysis Problem Setup The first step in the application of a Logit model for mode choice analysis is the specification (and estimation) of the utility functions for the alternative modes. Let's assume the following utility specifications: V(auto) = -0.85 - 0.09 * (auto TT) - 0.11 * (parking cost) + 0.00001 * (HH income) V(bus) = -0.09 * (bus TT) - 0.13 * (bus WT) - 0.70 * (bus fare) where V(auto) and V(bus) are the systematic utilities of auto and bus respectively; . (auto TT) is the travel time for auto (in minutes); (bus TT) is the travel time for bus (in minutes); . (bus WT) is the waiting time for bus (in minutes). For simplicity, we assume average waiting time is half the headway; (HH income) is the household annual income (in dollars); . (parking cost) and (bus fare) are in dollars Table 1 shows the characteristics of work trips for two population segments. You can think of segment A as people living near the center of a city and segment B as people living in the suburbs. People in both segments all work downtown. Table 1: Characteristics of work trips for two population segments Segment A Segment B Variable Auto Bus Auto Bus Auto travel time (min) 30 45 Parking cost ($) 4.25 9.50 Bus fare ($) 0.75 2.25 Bus travel time (min) 45 55 Bus headway (min) 15 20 Household annual income ($) 35,000 75,000