I T L S. WORKING PAPER ITLS-WP Social exclusion and the value of mobility. INSTITUTE of TRANSPORT and LOGISTICS STUDIES

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1 I T L S WORKING PAPER ITLS-WP Socal excluson and the value of moblty By John Stanley, Davd A. Hensher, Janet Stanley 1, Graham Curre 2, Wllam H. Greene 3 and Danne Vella-Brodrck 4 1 Sustanablty Insttute, Monash Unversty 2 Insttute of Transport Studes, Monash Unversty 3 School of Busness, New York Unversty 4 School of Psychology, Monash Unversty. July 2010 ISSN X INSTITUTE of TRANSPORT and LOGISTICS STUDIES The Australan Key Centre n Transport and Logstcs Management The Unversty of Sydney Establshed under the Australan Research Councl s Key Centre Program.

2 NUMBER: TITLE: ABSTRACT: KEY WORDS: AUTHORS: CONTACT: Workng Paper ITLS-WP Socal excluson and the value of moblty Ths paper nvestgates factors lkely to ncrease a person s rsk of socal excluson, drawng on survey data specfcally framed for ths purpose. We use a generalsed ordered logt model that accounts for observed and unobserved heterogenety and derve the margnal effects for each nfluencng attrbute. We fnd that people are less lkely to be at rsk of socal excluson f they have regular contact wth sgnfcant others, have a sense of communty, are not poor, are moble and are open to new experences whch enable them to grow on a personal level. The value of an addtonal trp s estmated at $A20. Socal excluson, Moblty, Melbourne Survey, Ordered Logt John Stanley, Davd A. Hensher, Janet Stanley, Graham Curre, Wllam H. Greene and Danne Vella-Brodrck Insttute of Transport and Logstcs Studes (C37) The Australan Key Centre n Transport Management The Unversty of Sydney NSW 2006 Australa Telephone: Facsmle: E-mal: tls@sydney.edu.au Internet: DATE: July 2010 Acknowledgement: Ths research was undertaken as part of Australan Research Councl Industry Lnkage Program Project LP : Investgatng Transport Dsadvantage, Socal Excluson and Well Beng n Metropoltan, Regonal and Rural Vctora. The ndustry partners are the Vctoran State Government, Local Government from the frnges of Melbourne, the Brotherhood of St Laurence (peak welfare organzaton) and Bus Assocaton Vctora, an ndustry assocaton representng bus operators n Vctora. Thanks are also due to Alexa Delbosc for research nput.

3 1. Introducton The concept of socal excluson has grown from work whch sought to better understand and represent poverty. Whle poverty and socal excluson are related, socal excluson descrbes the exstence of barrers whch make t dffcult or mpossble for people to partcpate fully n socety. Whle low ncome and unemployment are consdered mportant barrers, other examples nclude poor health, lmted educaton, ethnc mnorty status, age and poor moblty. The UK government s Socal Excluson Unt (SEU) undertook poneerng research around partcular forms of socal excluson, transport beng an early focus (Socal Excluson Unt 2003). Lnks were drawn (for example) between the excluson of people who do not have access to a car, and ther needs for educaton, employment, access to health and other servces and to food shops, as well as to sportng, lesure and cultural actvtes. The ablty to access such resources asssts a person to be ncluded n socety and mprove ther well-beng. The work of the SEU has been sgnfcant n rasng concerns about lnks between moblty, accessblty and the prospects of a person beng socally excluded 1. Whle not specfcally measurng socal excluson, related work was undertaken by the European Moblate project, whch examned the role of moblty n the well-beng of older Europeans (Mollenkopf et al. 2005). Socal excluson s vewed n that research as a factor whch dmnshes well-beng. The Moblate research showed a strong postve relatonshp between an older person s level of outdoor moblty and ther qualty of lfe. Research has also recently been reported for nonworkng elderly Canadans, agan dentfyng sgnfcant assocaton between transport moblty benefts and qualty of lfe (Spnney et al. 2009). Nether of these studes, however, put monetary values on mprovements n moblty (trp makng). Untl recently, there has been lttle applcaton of socal excluson concepts wthn the transport feld n Australa. However, groups who mght be descrbed as transport dsadvantaged, n the sense that they have poor moblty, have been studed and these groups may overlap wth those thought lkely to be at rsk of socal excluson, from moblty orgns. For example, Alsnh and Hensher (2003), Golob and Hensher (2007), and Harrs (2005) have researched transport ssues for senors, and Curre et al. (2005) have worked on accessblty to transport for youth n rural and regonal Australa. By mplcaton, measures to reduce transport dsadvantage are thought lkely to mprove the prospects for socal ncluson, although such lnks have not been emprcally valdated. Australan researchers, partcularly concerned about the consequences of poor publc transport servce levels n the outer suburbs of Australan ctes, have undertaken smlar nvestgatons to the SEU, to assess the lkelhood that mproved publc transport servce levels mght reduce the rsks of socal excluson n these areas. Ths research led to the adopton, by the Vctoran State Government, of mnmum bus servce levels n outer urban Melbourne, descrbed as socal transt. The mplementaton of these mnmum servce levels has led to very strong patronage growth and socal benefts (Bell et al. 2006, Loader and Stanley 2009). In buldng the argument for why new or substantally mproved publc transport servces were needed n outer urban Melbourne, the ntal absence of sold quanttatve evdence about the value of such servces to users was notable. Ths comment apples wth partcular force when there s a lkelhood that a number of such users are at rsk of socal excluson. Whle the tradtonal valuaton approach of measurng consumers surplus (or compensatng varaton) s approprate for small changes n servce levels, where some evdence of demand responsveness often exsts, new or dramatcally mproved publc transport servces nvarably lack such behavoural evdence of values. 1 Moblty relates to ease of movement and accessblty s ease of reachng destnatons, the latter requrng attenton to urban form, land use and to the qualty of destnatons. 1

4 The absence of evdence about such valuatons s not confned to Melbourne, but reflects a unversal problem n assessng new or substantally mproved publc transport servce levels. Thus, whle t may be possble to mount a qualtatve argument, on socal equty or socal justce grounds, about the mportance of moblty n provdng people wth the opportunty to engage n actvtes that may ncrease ther prospects of beng socally ncluded, valuaton s another matter. Ths paper reports fndngs related to lnkages between moblty and the rsk of socal excluson, wth partcular emphass on dervng a measure of wllngness to pay for addtonal trps, consstent wth the valuaton prncples that underle most cost-beneft studes. The rsk that a person wll be socally excluded s defned heren as the number of excluson thresholds a person fals (.e. the more thresholds faled, the greater the rsk of beng socally excluded). (Ths s explaned further below). Ths varable s a dscrete representaton of an underlyng contnuous scale and, as such, should be treated as an ordered response scale. A growng number of emprcal studes nvolve the assessment of nfluences on a choce amongst ordered dscrete alternatves. Ordered logt and probt models are well known, ncludng extensons to accommodate random parameters and heteroscedastcty n unobserved varance (Bhat and Pulugurtha 1998, Ferrer--Carbonell and Frjters 2004, Greene 2007). The ordered choce model can also accommodate non-lnear effects of any varable on the probabltes assocated wth each ordered level (see for example, Eluru et al. 2008). However, the tradtonal ordered choce model holds the threshold values fxed. Ths can lead to nconsstent (.e. ncorrect) estmates of the effects of varables and, by mplcaton, to ncorrect estmates of mpled relatve values whch may be derved from the models. Specfyng the ordered choce model to account for threshold random heterogenety, as well as underlyng systematc sources of explanaton for unobserved heterogenety, s a logcal extenson n lne wth the growng nterest n choce analyss n establshng addtonal canddate sources of observed and unobserved taste heterogenety. The approach mplemented heren generalses the exstng approaches to ordered choce analyss wth a polychotomous (n contrast to bnary) ordered response scale 2. The paper s organsed as follows. The next secton dscusses factors whch relate to a person s lkelhood of beng at rsk of socal excluson, together wth ways of measurng relevant concepts. Ths s followed by the econometrc specfcaton of the generalsed ordered choce model, focusng on the random threshold structure and ts behavoural appeal. We then ntroduce the emprcal context used to test ths model. The emprcal analyss that follows presents the estmated model, together wth the assocated margnal effects that are the bass of behavoural assessment. The wllngness to pay for addtonal trps mpled by the modellng s presented and compared wth values derved from an alternatve approach. The paper concludes wth some observatons on the merts of the extended model form. 2. Socal excluson 2.1 Dmensons and mtgatng factors The concept of socal excluson s often used rather loosely and has, therefore, been dffcult to measure. However, deas about what socal excluson comprsed appeared to show consstent trends from about 2000, wth work from a key group of researchers n the UK (see, for example, Gordon et al. 2000, Burchardt et al. 2002, Levtas 2000). Income and employment status were ncluded n all models, and most ncluded varables of socal relatons, partcpaton, cvc engagement and support n tmes of need. The measurement approach used n the current project drew on the four dmensons of socal excluson dentfed by the London School of 2 The model developed by Ferrer--Carbonell and Frjters (2004) ntroduces random thresholds but s lmted to bnary choce. 2

5 Economcs approach (Burchardt et. al 2002), but wth an addtonal dmenson of partcpaton, as commonly used by others 3. The current project used fve dmensons to ndcate a person s rsk of beng socally excluded (defned as SOCEXA n ths study). Household ncome less than a threshold of $500 gross per week. Employment status not employed, n educaton or tranng or lookng after famly or undertakng voluntary work. Poltcal actvty dd not contrbute to/partcpate n a government poltcal party, campagn or acton group to mprove socal /envronmental condtons, to a local communty commttee/group n the past 12 months. Socal support not able to get help f you need t from close or extended famly, frends or neghbours. Partcpaton dd not attend a lbrary, sport (partcpant or spectator), hobby or arts event n the past month. Ths study assumed that the more of these dmenson thresholds that descrbe a person s stuaton (whch we call falng the threshold), the greater s ther rsk of socal excluson. Ths approach weghts each dmenson equally. The dependent varable, SOCEXA, s a categorcal varable wth sx possble values, beng the number of excluson hurdles that a person fals (from 0 to 5 nclusve). Ths was subsequently reduced to four categores n the emprcal analyss, because no survey respondent faled aganst all fve hurdles and only one faled aganst four. The ordered response values for SOCEXA thus ranged from zero to three. A revew of the broad lterature n economcs, psychology, socal work and transport suggests a number of key factors may be at play n mtgatng the rsk of socal excluson. These nclude age, household ncome, a sute of personalty and well-beng varables, ndcators of a person s socal captal, a person s attachment to communty, percepton of personal safety and a person s travel actvty (measured separately as the number of trps on a day and the number of klometers travelled, as a statement on current accessblty and actvty engagement). The study data collecton process gathered nformaton relevant to all these varables, wth some key data summarsed n Tables 1 and Socal captal and connecton wth communty A person s consdered less lkely to be at rsk of socal excluson when they are embedded n socetal structures: famly and frends, the communty and socety (Bronfenbrenner 1979). Two key concepts, socal captal and connecton wth communty, have become an ncreasngly mportant part of the nternatonal socal polcy debate n recent years, partcularly n the Unted States and Australa. Very lttle evdence s avalable on the assocaton between socal captal, connectons wth communty, socal excluson and the role of the ablty to be moble (Curre and Stanley 2008). Putnam (2000) has suggested there are negatve lnks between car dependence and the development of effectve socal captal. Urry (undated) argues that to be a full, actve and engaged member of socety requres socal captal wthn localtes and partcpaton nvolves transportaton and moblty. As wth socal excluson, there s defntonal varablty around socal captal and communty connectedness. For ths study, socal captal s defned as a person s socal networks plus assocated ssues of trust and recprocty (Stone, Gray and Hughes 2003). Each of these components was measured ndependently. Communty connectons occur when people become 3 The LSE used a dmenson termed socal nteracton but descrbe ths as socal support: a lack of someone who could offer support n one of fve dmensons - lsten, comfort, help n crss, relax wth, really apprecates you. The current study ncluded the dmenson of socal support and added partcpaton, referrng to nvolvement n communty-provded servces or events. 3

6 actvely engaged n the communty. They feel socally connected, may become volunteers or leaders, and a sense of communty prde s establshed (Vnson 2004). Socal captal was measured n ths study by: (1) measures of the frequency wth whch respondents keep n touch wth members of ther close famly, members of ther extended famly, frends/ntmates, neghbours, work colleagues, people assocated wth groups n ther communty (such as church, sportng, clubs, school self-help or voluntary groups) and government offcals/communty leaders; (2) measures of the extent to whch respondents trust people n general; and (3) measures of recprocty (the extent to whch respondents feel that people are wllng to help out n ther local communty). Relevant aggregate responses are shown n Tables 1 and 2. A comprehensve measurement of communty engagement nvolves a wde range of possble measures (Curre and Stanley 2008). For the current study, the answer to the queston, I thnk my neghbourhood s a good place for me to lve, was used as a measure of communty connectedness. Answers were measured on a seven pont Lkert scale, from strongly dsagree to strongly agree and, for modellng purposes, responses were treated as a reflectng a contnuous varable 4. In modelng, the varous measures of socal captal were all treated as dummy varables, because they are rated for varous groups of people (for example, close famly, extended famly, close frends) on a broad frequency of nteracton bass (not at all; sometmes; frequently), rather than on a contnuous scale. 2.3 Psychologcal aspects There s lkely to be an assocaton between socal excluson and personal attrbutes (Mollenkopf et al. 2005). The current study utlsed measures whch assess both subjectve and psychologcal aspects of well-beng, and cogntve (Psychologcal Well-beng) and affectve (Postve Affect and Negatve Affect) components. Furthermore, personalty measures were ncluded to (1) enable the unque contrbutons of other varables to be better assessed and (2) to determne any nteracton effects of personalty, especally wth regard to extraverson and locus of control Subjectve well-beng Two measures of subjectve well-beng were used. The Postve and Negatve Affect Schedule (Watson, Clark and Tellegen 1988) (PANAS) was employed to assess postve and negatve emotons, both beng needed because they are beleved to be ndependent constructs and may contrbute to socal excluson dfferently (Dener and Emmons 1984; Run et al. 2003). The scale comprses 10 postve emotonal descrptors such as nspred and excted and 10 negatve emotonal descrptors such as gulty and upset. Respondents ndcated the extent to whch they generally felt ths way on a 5-pont Lkert scale, rangng from 1 = very slghtly or not at all to 5 = extremely. A doman specfc measure s the Personal Well-beng Index (Internatonal Wellbeng Group, 2006). It contans eght tems assessng one s level of satsfacton wth seven theoretcally derved qualty of lfe domans: standard of lvng, health, achevng n lfe, relatonshps, safety, communty-connectedness and future securty, as well as one global queston askng How satsfed are you wth your lfe as a whole? Responses are made on a 10-pont scale rangng 5 from completely dssatsfed to completely satsfed. The seven doman scores can be 4 Ths varable could have been treated as a categorcal varable but happness research provdes some support for the approach adopted (see, for example, Van Praag and Ferrer--Carbonell 2004, Frey and Stutzer 2005). 5 The PWI has been shown to have satsfactory psychometrc propertes as detaled n reports on the Australan Unty Wellbeng Index ( 4

7 summed to derve a total subjectve well-beng score (labelled PWI n the current study) or each tem can be analysed as a separate varable Psychologcal well-beng Subjectve well-beng s based on maxmzng pleasure and mnmzng pan. Psychologcal well-beng accentuates the mportance of lfe meanng and personal growth for sustaned wellbeng. It espouses that factors such as lfe purpose, opportuntes for growth and reachng one s potental and havng postve relatonshps are mportant for well-beng. Ryff s (1989) Scales of Psychologcal Well-beng s algned wth ths latter perspectve. The scale assesses sx theoretcally derved dmensons of psychologcal well-beng: self-acceptance, autonomy, envronmental mastery, postve relatons wth others, personal growth and purpose n lfe. The 42 tem verson of the measure was employed for the current study, as ths was thought to provde a good balance between the need for brevty and satsfactory psychometrc qualtes. Responses are made on a Lkert scale rangng from strongly dsagree to strongly agree Personalty One of the strongest and most consstent ndvdual dfference factors assocated wth wellbeng s personalty and most especally the personalty trat of extraverson (Dener et al. 1999). One explanaton for ths s that extraverts are happer because of ther heghtened level of socal nvolvement relatve to ntroverts (Argyle and Lu 1990). Hence, when examnng the relatonshp between well-beng and socal excluson, t s mportant to seek to dentfy the contrbutons made by personalty factors such as extraverson to ascertan the unque contrbutons of addtonal factors. The Ten Item Personalty Inventory (TIPI) (Goslng, Rentfrow and Swann 2003) was used n the current study, a 10-tem self-report measure of the Bg-5 personalty dmensons: openness, conscentousness, extraverson, agreeableness and neurotcsm (emotonal stablty). It s ntended for use where personalty s not a major focus of the study and n tme-lmted crcumstances. Responses are on a 7- pont Lkert scale rangng from dsagree strongly to agree strongly. Hgher scores reflect hgher levels of the relevant personalty dmenson. Intal revew of the study data suggested that extraverson was the most lkely measure from ths set to be an mportant contrbutor to explanng a person s rsk of socal excluson Locus of control Locus of control, accordng to Rotter (1966), concerns generalzed nternal or external belefs about future events and outcomes. Internal control refers to the belef that control of future outcomes s due to personal attrbutes and behavours, whle external control refers to the expectancy that control resdes n the hands of others or as a result of chance. It has been found that external locus of control s assocated wth negatve affect (Emmons and Dener 1985) and nternal locus of control s a strong predctor of lfe satsfacton (Hong and Gannakopoulos 1994). Rotter s (1966) twenty-nne forced choce tem scale was used to measure locus of control. Low scores reflect an nternal orentaton. 2.4 Perceptons of safety It was thought lkely that f people do not feel safe n varous contexts, ths could mpact on ther rsk of beng socally excluded. Ths s consstent wth the fndngs of a number of research projects (Socal Excluson Unt 2003). Three contexts were ncluded n ths regard: feelng safe on and around publc transport; feelng safe n the respondent s own street at nght; feelng safe n the respondent s home at nght. Fve possble responses ranged from very 5

8 unsafe through to very safe. None of these varables proved to be sgnfcant n the subsequent analyss, so they are not consdered further n ths paper. 3. An ordered polychotomous choce model wth preference heterogenety n the thresholds The ordered response model s well establshed for the analyss of categorcal, non-quanttatve responses (see Greene and Hensher n press 2010). The model foundaton s an underlyng random utlty (or latent regresson) model, y * = β x + ε, (1) n whch the contnuous latent utlty, y* s observed n dscrete form through a censorng mechansm (equaton 2). y = 0 f µ-1 < y* < µ0, = 1 f µ0 < y* < µ1, (2) = 2 f µ1 < y* < µ2 =... = J f µj-1 < y* < µj. The model contans the unknown margnal utltes, β, as well as J+2 unknown threshold parameters, µj, all to be estmated usng a sample of n observatons, ndexed by = 1,...,n. The data consst of the covarates, x and the observed dscrete outcome, y = 0,1,...,J, such as a Lkert scale response or an ordered ndex. The conventonal assumptons for the error dsturbance are that ε s contnuous wth conventonal cdf, F(ε x) = F(ε) wth support equal to the real lne, and wth densty f(ε) = F ( ε). The assumpton of the dstrbuton of ε ncludes ndependence from x. The probabltes assocated wth the observed outcomes are gven as equaton (3). Prob[y = j x] = Prob[ε < µj - β x] - Prob[µj-1 - β x], j = 0,1,...,J. (3) Several normalsatons are needed to dentfy the model parameters: () gven the contnuty assumpton, n order to preserve the postve sgns of the probabltes, we requre µ j > µ j-1 ; () f the support s to be the entre real lne, then µ -1 = - and µ J = + ; and () assumng that x contans a constant term, we wll requre µ 0 = 0. 6 Gven the overall constant, J-1 threshold parameters are needed to partton the real lne nto the J+1 dstnct ntervals. We mpose the dentfyng restrcton σε = a known constant, σ, and assume that Var[ε x] = π2/3 n the logt model form mplemented below. The lkelhood functon for estmaton of the model parameters s based on the mpled probabltes gven n equaton 4. Prob[y = j x] = F(µj - β x) - F(µj-1 - β x) > 0, j = 0,1,...,J. (4) Estmaton of the parameters s a straghtforward problem n maxmum lkelhood estmaton (see, for example, Greene 2008). Based on Greene and Hensher (n press, 2010), we present an extenson of the basc model (4) above to allow for three ways n whch ndvdual preference heterogenety can substantvely appear: n the random utlty model (the margnal utltes), n 6 Wth a constant term present, f ths normalsaton s not mposed, then addng any nonzero constant to µ0 and the same constant to the ntercept term n β wll leave the probablty unchanged. 6

9 the threshold parameters, and n the scalng (varance) of the random components. The ntrnsc heterogenety n utlty functons across ndvduals s captured by wrtng β = β + z + Γv (5) where Γ s a lower trangular matrx and v ~ N[0,I]. β s normally dstrbuted across ndvduals wth condtonal mean (equaton 6) and condtonal varance (equaton 7): E[β x,z ] = β + z (6) Var[β x,z ] = ΓIΓ = Ω. (7) Ths s a generalsed random parameters formulaton ncludng thresholds modelled randomly and nonlnearly as equaton 8. µ j = µ,j-1 + exp(α j + δ r + σ j w j ), w j ~ N[0,1] (8) Wth normalsatons and restrctons µ -1 = -, µ 0 = 0, µ J = +. For the remanng thresholds, we have equaton 9 whch preserves the orderng of the thresholds and ncorporates the necessary normalzatons, and allows observed varables and unobserved heterogenety to play a role both n the utlty functon and n the thresholds. The thresholds, lke the regresson tself, are shfted by both observable (r ) and unobservable (w j ) heterogenety. µ 1 = exp(α 1 + δ r + σ 1 w j1 ) = exp(δ r ) exp(α 1 + σ 1 w j1 ) (9) µ 2 = exp(δ r ) [exp(α 1 + σ 1 w j1 ) + exp(α 2 + σ 2 w j2 )], j µ j = exp(δ r ) ( exp( ) m= 1 m mwm ) Σ α +σ, j = 1,...,J-1 µ J = +. The probabltes are all postve and sum to one by constructon. If δ = 0 and σ j = 0, then the orgnal model s returned, wth µ 1 = exp(α 1 ), µ 2 = µ 1 + exp(α 2 ) and so on. The dsturbance varance s allowed to be heteroscedastc, now specfed randomly as well as determnstcally. Thus, Var[ε h,e ] = σ 2 = exp(γ h + τe ) 2 (10) where e ~ N[0,1]. Let v = (v 1,...,v K ) and w = (w 1,...,w,J-1 ). Combnng terms, the condtonal probablty of outcome s gven n equaton 11 (see Greene and Hensher n press 2010). Prob[y = j x,z,h,r,v,w,e] = µ β x µ j, j 1 β x F F exp( γ h +τ e) exp( γ h +τe) (11) The term that enters the log lkelhood functon s uncondtoned on the unobservables. Thus, Prob[y = j x,z,h,r] = µ j β x µ, j 1 β x F F f ( v,, ).,, e w e dvdwde v w exp( +τ e) exp( +τe) γh γh (12) 7

10 The model s estmated by maxmum smulated lkelhood (Greene and Hensher, n press 2010). All elements of the generalsed form are nvestgated n the emprcal study, although as shown n the fnal model, not all elements were found to be statstcally sgnfcant. 4. Emprcal applcaton: Assessment of socal excluson The study conducted face-to-face ntervews across Melbourne wth 443 adults (Curre and Delbosc 2009). 7 The survey samplng frame was desgned to ensure coverage of nner and outer metropoltan areas, people lvng n areas wthn walkng dstance to publc transport and outsde such dstance, low and hgh ncome levels and a representatve age dstrbuton 8. It was desgned as a follow-on survey from an exstng Melbourne household travel survey, to extend data scope wthout extendng the tme for admnsterng the survey. Because of the follow-on nature of ths survey, a random sample of ntervewees who had completed the travel survey was nvted to opt-n to the present survey. Hghly dsadvantaged people were under-represented n the survey, havng been smlarly under-represented n the pror household travel survey, a common problem for surveys. A separate study has been undertaken wth a sample of such people, workng through welfare agences (not reported n the present paper). Ths factor asde, the sample was regarded as representatve of the varous strata that were requred. The survey was admnstered by the same professonal survey organzaton that admnstered the travel survey. The survey questonnare ncluded fve sectons. Screenng questons (e.g. household sze, motor vehcles, ncome, chldren aged under 18, Aborgnalty, dsablty) Secton A: Socal Excluson (varous socal excluson ndcator questons and questons related to socal captal, communty strength and socal well beng measures) Secton B: Well-beng (varous well-beng and personalty measures). Secton C: Transport (buldng on detals n the pror household travel survey) Close (educaton, country of brth, varous ncome questons, ncludng relatve poverty). An overvew of key data tems s gven n Tables 1 and 2. 7 People aged are the subject of separate research. 8 The general study approach and sample frame development are dscussed n Curre and Delbosc (2009). 8

11 Table 1: Broad survey data Varable (Model varable) Adults only sample (N = 443) AGE (AGE): % % % >65 30% Average respondent age 55 years HOUSEHOLD INCOME: Under $A500 per week $A pw $A pw >$A2000 pw Average daly household ncome (HINCPDY) AVERAGE TRIPS PER DAY (NUMTRPS) AVERAGE KILOMETRES PER DAY (KMS) NUMBER OF SOCIAL EXCLUSION THRESHOLDS FAILED (SOCEXA): 0 thresholds 1 threshold 2 thresholds 3 or more thresholds SOCIAL CAPITAL/COMMUNITY STRENGTH MEASURES: How much do you trust people n your local communty (trust)? How wllng are people to help out n your local communty (recprocty)? I thnk my neghbourhood s a good place for me to lve (Socomm) WELL-BEING MEASURES: Personal Well-beng Index Postve Affect Negatve Affect Psychologcal Well-beng (autonomy) Psychologcal Well-beng (envronmental mastery) Psychologcal Well-beng (personal growth) Psychologcal Well-beng (postve relatons wth others) Psychologcal Well-beng (purpose) Psychologcal Well-beng (self-acceptance) Personalty Extraverson Locus of Control 28% 36% 20% 17% $A (Std. Dev. $188.22) 3.6 (Std. Dev. 2.8) 36.6 (Std. Dev. 57.5) 41% 37% 14% 7% Not at all = 3%, Sometmes = 68%, Yes defntely = 28%. Not at all = 3%, Sometmes = 60%, Frequently 37%. Strongly Agree = 30%, Agree = 56%, Slghtly agree = 9%, Nether agree nor dsagree = 2%, Slghtly dsagree = 2% Dsagree = 1%, Strongly dsagree = 0% Mean: 7.4 SD: 1.37 Range: 1.12 to 10 Mean: 3.6 SD:.59 Range: 1.5 to 5 Mean: 1.6 SD:.52 Range: 1.0 to 4.3 Mean: 4.6 SD:.64 Range 2.9 to 6.0 Mean: 4.6 SD:.65 Range 1.9 to 6.0 Mean 4.7 SD:.67 Range 1.9 to 6.0 Mean 4.8 SD:.60 Range: 2.7 to 6.0 Mean: 4.5 SD:.69 Range: 2.0 to 6.0 Mean: 4.5 SD:.68 Range: 1.7 to 6.0 Mean: 4.3, SD: 1.4, range 1 to 7 Mean: 10.2, SD: 10.2, range 1 to 22 9

12 Group Table 2: Socal networks: How often do you keep n touch wth the followng people? n.a. Never Less than once a year (%) More than once a year (%) About once a month About once a week (%) (%) (%) (%) (%) Members of your close famly Members of your extended famly % Frends/ntmates Neghbours Most days Table 1 shows that the average daly trp rate among sample respondents was 3.6. However, the rate for people who faled aganst none of the thresholds for socal excluson rsk was 3.8 (not shown n Table 1). Ths fell to 3.2 for people who faled aganst one or more thresholds, fallng further to 2.8 trps per day for people who faled two or more thresholds. In short, people assessed as beng at a relatvely greater rsk of socal excluson are travellng less frequently than others. Generally, the descrptve data for the well-beng and personalty measures conform wth means and standard devatons found n other well-beng studes. Most noteworthy s the mean for the PWI whch s wthn the range typcally obtaned for Western populatons, namely ±fve per cent of the seventy per cent value of the measurement scale (Cummns, 2001). Ths suggests that, n terms of well-beng, the current sample s a good representaton of the standard of wellbeng typcally found n the general communty. Table 2 shows most people had contact wth members of ther close famly at least weekly. Contact wth extended famly members was less frequent, weekly to monthly contact beng most common. Contact wth frends/ntmates and wth neghbours was less frequent than wth members of the close famly but more frequent than wth members of the extended famly. A small number of people never or rarely had socal contact wth famly or frends. They rsk mssng the socal support and potental opportuntes that may come from these networks. 5. Emprcal analyss: Socal excluson model 5.1 Model results The fnal model s gven n Table 3. Ths model was selected after extensve assessment of the full range of canddate varables n the survey. The generalsed ordered logt model has an overall log-lkelhood at convergence of , compared to the log-lkelhood wth no nformaton on the explanatory varables and constant of Ths model has two partcularly mportant features: frst, the nonlnear specfcaton of household ncome enables dervaton of the margnal wllngness to pay for daly trp rates as a functon of household ncome. In lne wth prevous studes on happness and socal well-beng, we nvestgated varous functonal forms for household ncome and found that the quadratc had the best statstcal ft n terms of the t-value, whlst also supportng the hypothess that the margnal utlty of household ncome declnes as ncome ncreases. Second, we have strong evdence that the threshold parameters exhbt ndvdual-specfc heterogenety, that s due to four observed person-specfc effects (Personal Well Beng Index (PWI), klometres travelled (kms), Negatve Affect (NA) and Age (Age)). The mean estmates of the threshold dstrbutons are statstcally sgnfcant; however, the presence of observed sources of heterogenety has not resulted n unobserved heterogenety n the thresholds beng statstcally sgnfcant. In partcular, three of the four observed threshold covarates are postve and one (age) s negatve. Ths suggests that ndvduals wth hgher values for the personal wellbeng ndex (PWI), negatve affect (NA) and daly klometres of travel (kms) tend to have 10

13 lower threshold parameter estmates wthn each threshold parameter dstrbuton (gven the mean s negatve) than ndvduals wth lower values and the reverse apples for age. What ths mples, for example, s that as one ages, all other nfluences remanng unchanged, the probablty of reducng the number of hurdles assocated wth socal excluson, s hgher. By not accountng for these observed sources of heterogenety, we would be forcng all ndvduals to dsplay the same threshold parameter values, whch would result n a dfferent dstrbuton of probablty outcomes assocated wth each level of socal excluson. Table 3: Generalsed ordered logt model (t-ratos n brackets), 443 observatons Dependent varable s SOCEXA Attrbute Unts Generalsed Ordered Logt Mean Constant (7.03) Person s sense of communty (Socomm) 1-7 scale (-4.9) Contact wth members of the close famly 1, (2.85) more than once a year (Scnmgt1a) Never have contact wth members of 1, (3.63) extended famly (Scnenev) Do not trust people n general (Scntnot) 1, (3.32) Household gross ncome per squared ($/day) (-7.74) 55,265 Number of trps on travel day (Numtrps) Trps/day (-2.65) Personal growth (Pwbperg) 1-6 scale (-3.22) Threshold parameters: (u 1 = 0) µ (-4.47) µ (-6.34) Standard devaton of threshold parameters: µ (0.12) µ (0.28) Systematc nfluences on random thresholds: Personal well-beng ndex (PWI) 1-10 Scale (19.24) Daly klometres of travel (kms) Klometres (7.0) per day Negatve affect (NA) 1-5 Scale (17.49) Age of ndvdual Years (-2.77) Count of choce responses: Log-Lkelhood at zero Log-Lkelhood at convergence Table 3 shows that several varables are sgnfcantly assocated wth the rsk of beng socally excluded. Socomm s a measure of a person s connecton wth communty. Gven the negatve sgn on ths varable, the more someone agrees wth the statement, I thnk my neghbourhood s a good place for me to lve, the less lkely they are to be at rsk of socal excluson. The frst two statstcally sgnfcant socal captal varables are both measures of the frequency wth whch a person has contact wth varous mportant others. Contact wth a person s close famly (Scnmgt1a) and wth ther extended famly (Scnenev) were both sgnfcant. Both these dummy varables effectvely appear as lmts on nteractons to foster ncluson. Contact wth close frends, people n the local communty and people n general were tested and not found to be sgnfcant. 11

14 The thrd sgnfcant socal captal measure s a measure of trust. The rated measure (Scntnot) s a dummy varable for people n general. The postve co-effcent on Scntnot says that the rsk of socal excluson s greater f the person does not trust people n general. Personal Growth (varable Pwbperg) also stands out as sgnfcantly lnked to rsk of socal excluson. People generally reportng low levels of Personal Growth tend to experence a sense of personal stagnaton and can become generally dsconnected wth socal lfe. Conversely, ndvduals who are hgh on Personal Growth do not feel obstructed by lfe crcumstances. Instead they are open to tryng new experences and subsequently feel that they are constantly developng and realzng ther full potental. It s not surprsng therefore, that socal excluson and Personal Growth are nversely related, such that those hghest on Personal Growth are judged as beng least lkely to be at rsk of socal excluson. Household ncome and number of trps per day are both sgnfcant nfluences on the rsk of beng socally excluded. The hgher a respondent s household ncome and the more trps are made per day, the less the rsk of beng socally excluded. Overall, the model suggests that the rsk of someone beng socally excluded s reduced the hgher ther connecton wth communty, household ncome, realsed moblty and level of personal growth. The rsk of socal excluson ncreases f they only have contact wth members of ther close famly more than once a year (but less than monthly), never have contact wth members of ther extended famly, and do not trust people n general. Fnally, the threshold parameters on the utlty scale (.e. µ 1 and µ 2 ) suggest that the swtchng values for utlty are, at the mean, statstcally sgnfcant, but there s no evdence of randomly dstrbuted unobserved heterogenety. However, there s heterogenety assocated wth systematc sources, namely the personal well-beng ndex and daly klometres of travel. Hence, all other nfluences remanng unchanged, the threshold utlty ponts are less negatve for ndvduals undertakng more klometres per day and wth a more postve personal well-beng ndex. Another way of statng ths s that ndvduals who get out and about more (as proxed by daly klometres) and who have greater personal well-beng, tend to have less socal excluson thresholds to cross. 5.2 Valuaton of addtonal trps A key focus of ths paper s wllngness to pay for ncreased moblty, as measured by trp actvty. The data n Table 3 can be used to derve the value of an addtonal trp at any gven household ncome level, through estmaton of the margnal rate of substtuton (MRS) between trps and ncome (for a common tme perod, such as a day). Fgure 1 summarses the resultng MRS between trp rates and gross household ncome, reflectng wllngness to pay for an addtonal trp. We fnd that the mean level of daly equvalent household ncome that a representatve ndvdual s wllng to pay s up to $A19.30 for an addtonal trp. Ths value s not mode-specfc. It s essentally wllngness to pay to engage n an addtonal actvty, snce the study s trp dares algn trps and actvtes. Ths mean estmate declnes as household ncome ncreases, the mpled value approxmately halvng as ncome doubles. Ths s broadly n lne wth the UK Treasury Green Book (2003, Annex 05), whch deals wth dstrbutonal weghtng n project evaluaton. That approach notes emprcal evdence suggestng that, as ncome s doubled, the margnal value of consumpton to ndvduals s about halved. Ths s approxmately true for trps n Fgure 1. The Green Book approach mples that, n a cost-beneft framework, benefts to a person on half average ncome levels would be weghted at twce that of the average ncome earner. The values of an addtonal trp derved from the choce modellng presented n ths paper closely algn wth ths weghtng. 12

15 Fgure 1: Margnal rate of substtuton between number of daly trps and average daly household ncome MRS 30 MRS Average daly household ncome ($) Why mght values be hgher at lower ncome levels? Our nterpretaton s that, n our sample, people on lower ncomes take fewer trps. If we can add a trp, ths s a large relatve ncrease n moblty and assocated actvty levels and a relatvely hgh wllngness to pay s not surprsng, compared to the margnal trp value to someone who undertakes more trps (and has hgher ncome). For someone wth low ncome, f that addtonal trp s assocated wth new employment, then the margnal value could be very hgh ndeed. How does ths value of $A19.30 for an addtonal trp compare to values that mght be derved from the applcaton of generalsed travel cost approaches to beneft measurement? Generalsed travel cost s usually measured as a combnaton of fnancal costs (vehcle operatng costs or fares) plus a valuaton of the elements of travel tme savngs. The latter ncludes weghtng of attrbutes of journeys (walk, wat, etc.) accordng to user perceptons factored by a value of travel tme savngs. The conventonal generalzed cost approach appled wthn the context of the Melbourne metropoltan area s documented n local and natonal gudelnes for the apprasal of transport projects (Department of Infrastructure 2005; Australan Transport Councl 2006). Applyng that approach, based on parameters that are comparable to the transport survey results used n ths paper, results n an mpled value of $A7.07 for an addtonal car trp and $A9.56 for a publc transport journey. However, the margnal value of addtonal trps, whch s the focus of ths paper, s typcally estmated n transport project apprasals usng the consumers surplus rule of a half appled to generated traffc. Under ths approach the mpled value of addtonal trps s about $A3.50 for a car trp or $A4.80 for a publc transport trp. Ths s well below the representatve estmate of $A19.30 derved n ths paper. The dfference s lkely to be due to generalsed cost estmates beng approprate for beneft estmaton for small changes n travel opportuntes (such as a slghtly faster trp) but not for major changes n trp behavour (for example, a much hgher publc transport servce frequency or a new servce). Wth a typcal daly trp rate of about 2.5 to 5 return trps, an addtonal trp s a non-margnal change n actvty, where valuaton should ncorporate expected consumer s surplus on the travel actvty, not be smply estmated based on expected travel costs. Ths mples hgher values for non-margnal changes n travel actvty, whch s what the result modeled n ths paper ndcates. 13

16 5.3 Partal effects of each nfluencng source A drect nterpretaton of the magntude and sgn of the parameter estmates n Table 3 s strctly not nformatve, gven the logt transformaton of the choce dependent varable. Interpretaton of the coeffcents n the ordered choce model s more complcated than n the ordnary regresson settng. There s no natural condtonal mean functon n the model. The outcome varable, y, s merely a label for the ordered, non-quanttatve outcomes. As such, there s no condtonal mean functon, E[y x] to analyze. In order to nterpret the parameters, one typcally refers to the probabltes themselves. A partal (or margnal) effect s the nfluence a one unt change n an explanatory varable has on the probablty of selectng a partcular outcome, ceters parbus9. The margnal effects need not have the same sgn as the model parameters. The generalsed ordered choce model contans four ponts at whch changes n the observed varables can nduce changes n the probabltes of the outcomes, n the thresholds, μj, n the margnal utltes, β, n the utlty functon, x and n the varance, σ2. For convenence, let a vector a denote the unon of (x,r,z,h). Ths allows for cases n whch varables appear at more than one place n the model. h s the only element that was not statstcally sgnfcant n the model n Table 2 and wll be excluded from now on. The partal effect of a change n an element of a on the probablty wll depend on where t appears n the specfcaton. For cases n whch a varable appears n more than one locaton, the partal effect wll be the sum of the two or three terms. To avod a cumbersome re-parametersaton of the model, we assume at ths pont that a appears n full throughout the model; that s, as f a = x = r = z. Thus, we wrte the probablty of nterest as equaton 13. Prob( y = j a) = µ j ( β+ a + Γv ) a µ, j 1 ( β+ a + Γv) a (13) F F f ( v,, ).,, e w e dvdwde v w exp( τe) exp( τe) μ j s defned n equaton 9. Then, the set of partal effects s gven as equaton 14. Prob( y = j a) = a v, w, e µ j β a 1 f ( β 2 a +µ jδ) f ( v, w, e ) dvdwde exp( τe) exp( τe) µ, j 1 β a 1 f ( β 2, 1 ) (,, ),, e a +µ j δ f v w e dvdwde v w exp( τe) exp( τe) (14) The sum of three terms n the mddle of the expressons shows the three parts of a compound partal effect; n turn, these are the components of the change (a) due drectly to change n x, (b) ndrectly due to change n the varables that nfluence β, and (c) due to changes n the threshold parameters, respectvely. The partal effects must be computed by smulaton. If a varable appears only n x, then ths formulaton retans both the parallel regressons and sngle crossng features (see Greene and Hensher 2010 n press for more detals). Nonetheless, the effects are hghly nonlnear. However, f a varable appears anywhere else n the specfcaton, then nether of these propertes wll reman. Gven that the margnal effects are dervatves, not probabltes, they are not bounded by 0 and 1 and can be negatve. If the explanatory varable s very small, ts coeffcent wll be very large (hence we do not report the estmates for household ncome squared snce that s a very small number). We provde, n Table 4, the margnal (or partal) effects whch do have substantve 9 Ths holds for contnuous varables only. For dummy (1,0) varables, the margnal effects are the dervatves of the probabltes gven a change n the level of the dummy varable. 14

17 behavoural meanng, defned as the dervatves of the choce probabltes (equaton 13). As such they sum to zero across all four levels of the dependent varable. The four estmates n Table 4 for each varable are of greatest behavoural meanng wthn each varable, n contrast to between varables. For example, Socomm has a much hgher and postve dervatve for the level Y=0, suggestng that the probablty that the person has not faled aganst any of the fve ndcators of rsk of beng socally excluded ncreases qute a lot for a one unt ncrease n Socomm. Ths suggests that there s a far chance they wll be socally ncluded. Ths postve effect s also strong for the trp rate (Numtrps). Conversely, there s a relatvely hgh negatve dervatve on Y=0 for Scneneev and Scntot. The evdence n Table 4 suggests that where there s a postve and relatvely hgh partal effect assocated wth the lower levels of Y, the explanatory varable contrbutes to reducng the extent of socal excluson. The strongest canddates are a person s connecton wth communty (present), number of trps on travel day (ncrease) and personal growth (ncrease). The nverse s the case for do not trust people n general, and never have contact wth members of the extended famly. In summary, Table 4 enables us to establsh the degree of change n the probablty of movng between the number of socal wellbeng thresholds that a person fals to meet (as defned n Secton 2), whch s extremely useful n gaugng whch explanatory varables offer the greatest prospect of reducng socal excluson. The prmary nfluence s va the drect partal effects; however, the ndrect partal effects provde respondent-specfc varatons n the model s threshold parameters (n Table 3) that nfluence the level of utlty (or dsutlty) assocated wth the swtchng ponts between each level of SOCEXA. The ndrect effects are small for age, daly klometers and PWI, despte the statstcal sgnfcance of these effects n Table 3. However there s a notceable effect for Negatve Affect (NA) when the postve and negatve partal effects on the thresholds (see μj n Equaton 15) are compared, suggestng that an ncrease n NA wll ncrease the probablty of Y=1 and reduce the probablty of Y=2 and 3, by It has no effect on Y=0. Whle ths result regardng hgh NA beng assocated wth low rsk of socal excluson was not predcted per se, t s not overly surprsng. Correlates of Postve Affect (PA) and NA are dfferent and t s well known that PA and NA are related but ndependent constructs (Dener and Emmons 1984). NA tends to be more hghly correlated wth ll-health and neurotcsm rather than wth postve health outcomes. Furthermore, NA and PA are not smply nverse constructs whereby f one has hgh PA then NA wll be low. Over suffcent perods of tme, t s possble to experence both NA and PA. The results of the current study suggest that NA (lkely to be coupled wth a reasonable level of PA) s mportant for preventng socal excluson. It has been found that NA does serve some mportant functons whch nclude memory enhancement and strategc socal behavours such as beng effectvely persuasve n socal contexts (Forgas, 2007). It s also mportant to note that whle NA nfluences the extent to whch one experences socal excluson, t does not ndcate the extent to whch one feels socally ncluded and connected. One would expect PA to predct postve socal experences. 15

18 Table 4: Partal effects (Y(SOCEXA)=0,1,2,3) (Computed by averagng over observatons durng smulatons) Generalsed Ordered Logt Attrbute (equaton 14) Drect partal effects: Person s sense of communty (Socomm) , , , Contact wth members of the close famly more than once a year (Scnmgt1a) ,0.1093,0.1822, Never have contact wth members of extended famly (Scnenev) ,0.0746,0.1243, Do not trust people n general (Scntnot) ,0.0740,0.1233, Number of trps on travel day (Numtrps) , ,-0.008, Personal growth (Pwbperg) , , , Indrect partal effects for varables n thresholds: Personal well-beng ndex (PWI) 0.00,0.0349, , Daly klometres of travel (kms) 0.00,0.0006, , Negatve affect (NA) 0.00,0.076, , Age of ndvdual 0.00, , , Note: The fve margnal effects per attrbute refer to the levels of the dependent varable (.e. Y = 0, 1,2,3,4) Conclusons The fndngs provde sgnfcant evdence to suggest that moblty s postvely correlated wth the lkelhood of socal ncluson among adults: hgher trp makng mples less rsk of socal excluson. Hgher household ncome, connecton wth communty and personal growth (beng open to new experences) are also postvely related to a lower rsk of socal excluson. Low rates of contact wth an adult person s close and extended famles, conversely, are more lkely to reflect an ncreased rsk of socal excluson. Usng the statstcally sgnfcant relatonshps between household ncome, trp rates and the rsk of socal excluson, the value of addtonal trps for the adult populaton sample has been estmated at just under $A20 per trp. Ths s about twce the value that would be mpled by usng generalsed costs to nfer values and four tmes the value that results from usng the generated traffc (ffty per cent) rule. The authors are not aware of any pror drect estmates of the value of addtonal moblty derved n ths manner. The values are estmated to declne wth ncreasng household ncome levels. These new values are partcularly relevant to the assessment of new publc transport servces, where beneft estmaton has long been a queston mark. The recognton of randomness n the threshold parameters and the dentfcaton of systematc sources of heterogenety n the mean threshold parameter estmate s an mportant extenson of the exstng ordered choce model. Ths paper has brought together the key contrbutons n the lterature and extended them, n partcular to ensure preservaton of the orderng of thresholds n the context of random parametersaton of the thresholds. The specfc applcaton heren has hghlghted the role of random thresholds and decomposton, suggestng that the generalsed emprcal model s a rch behavoral addton to the lterature on ordered choce modellng. 16