A billion agents

[William E Craven]

>>   Let me suggest an example close to my own heart.  I am interested in

how people react to retail market price changes in electricity in future
demand-response systems.  There are some data from existing
demand-response systems but these function differently than newer
systems.  What's more, the populations are geographically different from
the target populations and they are much smaller.  We could survey
customers to see if they would allow their heating and air-conditioning
systems to respond to market prices.  The trouble with past surveys of
this type is that utility customers tend to be more willing to sacrifice
comfort in the abstract than in reality.  If one uses the PDF from the
survey, then the results are far different than the PDF from the
reality.  And, the reality only works for certain locales and climes.
<<

Overestimation of people's desire to change is always a problem with
stated preference surveys.  Revealed-preference data, where available,
should be used to augment stated preference data.  There's always issues
with translating from one environment to another, but still some common
sense adjustments can be applied from experience.  If, for instance, a
particular pricing proposal was found receptive by 10% of customers in
one metro area through SP surveys but when actually offered as an option
was only selected by 1% of customers you could make a back of the
envelope adjustment to a survey for another metro area and for planning
purposes say only 1/10th of people who say they'll make a switch actually
will switch.  As you get more SP data and post-implementation RP data you
can hopefully refine that back-of-the-envelope analysis into something
more formal.  You'll have to make allowances for changes in technology as
well as in the SP instrument itself from survey to survey in any
adjustments, so until the technology becomes well-established there's
always going to be a question about the reliability of the surveys.

Another issue with the usefulness of SP surveys is how well defined the
new alternative is for the respondent.  That's not necessarily an issue
with how well explained it is in the survey - it's more an issue of
people not understanding that thre's a paradigm-shift involved in the
question as to how they operate on a daily basis.  For something like a
light rail line, respondents may not have a clear idea when responding of
how far they'd have to drive (or walk) to access the line from their
homes, or how far they'd need to walk when exiting at their destination
end.  Also, if someone's never been a transit user, they may have
unrealistic ideas about what it is like to ride a train, or even a bus.
I can see something similar occurring with demand-responsive pricing of
utilities.  It's one thing to say "I can save money by not using
appliances between x and y hours" and quite another to consciously adjust
behavior on a daily basis to minimize costs.