Abstract
The qualitative impact of income effect omission on welfare measures obtained from mode choice models is analysed. This is done through an approximation of Hicksian measures of welfare in terms of market demands including an income effect. This measure is shown to be the addition of an approximation of the well known Marshallian measure and an income induced welfare impact (IWI). This is extended to the discrete choice framework and applied to the logit specification. The conditions under which users' benefits are underestimated at a mode choice level are established and illustrated. (Author/publisher).