nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒04‒19
four papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Axis of travel: Modeling non-work destination choice with GPS data By Arthur (Yan) Huang; David Levinson
  2. Dynamic Logit with Choice Aversion By Fudenberg, Drew; Strzalecki, Tomasz
  3. Sorting based on Urban Heritage and Income: Evidence from the Amsterdam Metropolitan Area By Mark van Duijn; Jan Rouwendal
  4. Invariance of the distribution of the maximum By Fosgerau, Mogens; Lindberg, Per Olov; Mattsson, Lars-Göran; Weibull, Jörgen

  1. By: Arthur (Yan) Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Based on in-vehicle GPS travel data in the Minneapolis - St. Paul Metropolitan Area, this research investigates how land use, road network structure, and route fa- miliarity influence home-based single-destination choice. We propose a new choice set formation approach which combines survival analysis and random selection. Our empirical findings reveal that: (1) Walkable opportunities and diversity of services at the destination influence destination choice. (2) Route-specific network measures such as turn index and speed discontinuity display statistically significant effects on destination choice. (3) The familiarity factors reflected by distance to home, work, and downtown also plays a role. A destination closer to home and work, all else equal, is more likely to be selected. A destination farther away from downtown is more attractive for auto users. This research contributes to methodologies in modeling des- tination choice using GPS data. The results enhance our understanding of non-work travel behavior and have implications for transportation and land use planning.
    Keywords: GPS data, non-work trips, land use, axis of travel, destination choice
    JEL: R14 R41 R42
    Date: 2015
  2. By: Fudenberg, Drew; Strzalecki, Tomasz
    Abstract: We characterize a generalization of discounted logistic choice that incorporates a parameter to capture different views the agent might have about the costs and benefits of larger choice sets. The discounted logit model used in the empirical literature is the special case that displays a “preference for flexibility†in the sense that the agent always prefers to add additional items to a menu. Other cases display varying levels of “choice aversion,†where the agent prefers to remove items from a menu if their ex ante value is below a threshold. We show that higher choice aversion, as measured by dislike of bigger menus, also corresponds to an increased preference for putting off decisions as late as possible.
    Date: 2015
  3. By: Mark van Duijn (VU University Amsterdam, University of Groningen, and Amsterdam School of Real Estate, the Netherlands); Jan Rouwendal (VU University Amsterdam, and Amsterdam School of Real Estate, the Netherlands)
    Abstract: Urban heritage is often concentrated in conservation areas with a protected status. Previous research argues that urban heritage attracts especially higher educated households who are likely to have higher incomes. The presence of these households may have a further impact on the attractiveness of the neighborhoods concerned, for instance through endogenous amenities like better shops or schools. If this is the case for high income households, conservation areas will have a further impact on the area’s attractiveness through the demographic composition of the residential area. In this paper we investigate the interaction between the preference for urban heritage – as an exogenous amenity – and the preference for areas with a high concentration of high income households – as an endogenous amenity. We develop a logit-based sorting model in which different incom e groups interact and estimate it for the Amsterdam metropolitan area. Results show that all employed households highly value conservation areas and prefer to live in areas with a high concentration of high income households. We investigate the impact of urban heritage on house prices and welfare through counterfactual simulations. The disappearance of urban heritage would result in a substantially more suburbanized location pattern of the high income households in the Amsterdam metropolitan area, and to lower welfare for all income groups.
    Keywords: Location choice; urban heritage; sorting models; discrete choice; heterogeneous household preferences; welfare analysis
    JEL: R2 J1 Z1
    Date: 2015–03–02
  4. By: Fosgerau, Mogens; Lindberg, Per Olov; Mattsson, Lars-Göran; Weibull, Jörgen
    Abstract: Many models in economics involve probabilistic choices where each decision-maker selects the best alternative from a finite set. Viewing the value of each alternative as a random variable, the analyst is then interested in the choice probabilities, that is, the probability for an alternative to give the maximum value. Much analytical power can be gained, both for positive and normative analysis, if the maximum value is statistically independent of which alternative obtains the highest value. This note synthesizes and generalizes previous results on this invariance property. We provide characterizations of the property within a wide class of distributions that comprises the McFadden GEV class, show implications in several directions, and establish connections with copulas. We illustrate the usefulness of the invariance property by way of a few examples.
    Keywords: Choice; random utility; extreme value; leader-maximum; invariance; independence
    JEL: C10 C25 D01
    Date: 2015

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