A comparison of two alternative behavioral choice mechanisms for household auto ownership decisions

Abstract

Auto ownership modeling plays an important role in travel demand analysis because it is a key determinant of the travel behavior of individuals and households. Discrete-choice auto ownership models use either an ordered-response choice mechanism or an unordered-response choice mechanism. The ordered-response mechanism is based on the hypothesis that an uni-dimensional continuous latent auto ownership propensity index determines the level of car ownership. The unordered-response mechanism is based on the Random Utility Maximization principle. This paper presents the underlying theoretical structures, and identifies the advantages and disadvantages, of the two alternative response mechanisms. The paper also compares the ordered-response mechanism (represented by the ordered-response logit model) and the unordered-response mechanism (represented by the multinomial logit model) empirically using several data sets. This comparative analysis offers strong evidence that the appropriate choice mechanism is the unordered-response structure. As a general guideline, auto ownership modeling must be pursued using the unordered-response class of models (such as the multinomial logit or probit model) and not using the ordered-response class of models (such as the ordered-response logit or probit).