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Colleagues TODAY's CTS seminar at UCL will be on: Behavioural Economics and Demand Modelling Pilo Willumsen Luis Willumsen Consultancy London 16.00 Wednesday 29 June 2011 Chadwick LT B05 Chadwick Building UCL ABSTRACT The recent financial crisis has sparked, quite naturally, a renewed interest in Behavioural Economics, the branch that studies how people actually make decisions as opposed to the assumptions of rationality underpinning much economic theory. Transport demand modelling is also based on similar assumptions of rational beings choosing carefully among alternatives to maximise their utility. Behavioural Economics has established that we do not always act rationally (something we knew already) and that some of this irrationality is entirely predictable: for example the fact that we overvalue what we "own" and that "free rides" are irresistible. The seminar will take a forecasting perspective and will use some of these irrationalities to illustrate why our current modelling tools fail. These failures are significant and affect the realism of models and, more importantly, the advice we provide to decision makers. It will also address the problem of different kinds of time and money (waiting and in-vehicle; cash and smart card payments) which also challenge our current models. Pointers for future research to address some of these issues will be given; it is hoped that this will generate a lively discussion on the future of model-based forecasting. About the speaker Dr Luis Willumsen is a Visiting Professor at the Department of Civil, Environmental and Geomatic Engineering at UCL. From 1975 to 1989 he taught graduate and undergraduate courses at Leeds, UCL and Imperial College and for 20 years he was a Director of the consultancy Steer Davies Gleave. He is co-author of "Modelling Transport" published by John Wiley and now in its fourth edition; this is used as core textbook in most postgraduate Transport courses throughout the world. He has directed many large scale urban studies in Britain, the rest of Europe and in emerging countries. He has also led demand and revenue studies form more than 50 transport private sector concessions, from metros in India to BRT in Colombia and toll roads in Australia, Mexico and Chile. This traffic and revenue advisory work, in particular, has influenced his thinking on model-based demand forecasting and risk analysis.