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This paper explains how principal-agent theory (PAT) can be used as an analytical tool to understand the traveller-Transport for NSW (TfNSW) relationship and minimise the agency problem in the relationship by examining traveller preferences for mode choices. The paper emphasises latent variables (LVs) and traditional objective attributes (TOAs) together during the choice process within the agency relationship, as a method by which the utility of the principal (traveller) can be maximised and evaluated using a discrete choice experiment, i.e. random parameter logit (RPL) model. The probability of car use is significantly higher than public transport, which indicates that an agency problem exists in the relationship and incorporating traveller preferences in the transport projects may minimise this problem.

Agency in Transport Service: Implications of Traveller Mode Choice Objective and Latent Attributes Using Ransom Parameter Logit Model