Income and taste in mode choice models: Are they surrogates?

The microeconomic foundations of mode choice models postulate modal utilities which are additive in income; this actually makes choice independent of this variable. On the other hand, it has been argued that income is correlated with variables that reflect taste and therefore has a place in the utility specification as a proxi for taste. In this paper a framework is proposed, based on a generalization of the present expenditure rate approach in order to explore the presumptive relation between income and taste empirically. Data from Santiago, Chile, is used and the results suggest that the use of income may not be adequate to identify taste differences.