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Mathematical Problems in Engineering
Volume 2014, Article ID 536872, 12 pages
Research Article

Exploring the Impact of Commuter’s Residential Location Choice on the Design of a Rail Transit Line Based on Prospect Theory

Department of Civil and Environmental Engineering, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

Received 7 October 2013; Accepted 18 June 2014; Published 4 August 2014

Academic Editor: Chaudry Masood Khalique

Copyright © 2014 Ding Liu. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This paper explores the impact of prospect theory based commuter’s residential location choice on the design problem of a rail transit line located in a monocentric city. A closed-form social welfare maximization model is proposed, with special consideration given to prospect theory based commuter’s residential location choice over years. Commuters are assumed to make residential location choice by a trade-off between daily housing rent and generalized travel cost to minimize their prospect values. The solutions properties of the proposed model are explored and compared analytically. It is found that overestimation exists for the optimal solutions of rail line length, headway, and fare based on traditional utility theory, compared with the optimal solutions of the proposed prospect theory based model. A numerical example is given to illustrate the properties of the proposed model.