Discrete-continuous Choice Model Research Articles

Stated response and multiple discrete-continuous choice models: Analyses of residuals

In sophisticated transport models, choice modelling is used to capture a wide range of behaviour, such as mode choice, vehicle choice and route choice. A newly developed approach to improving realism is the multiple discrete-continuous extreme value (MDCEV) model, which allows researchers to model the allocation of continuous amounts of a consumer good. Before implementing this model in overall frameworks, it is important to determine the accuracy of the forecasting. In this paper, an MDCEV model of household fleet choice based on data collected in a stated adaptation survey is presented. The model was used to predict the annual mileage of households with regard to 17 different types of cars, and the results of that forecast were compared to the actual data by calculating the residuals. The residual analysis showed that the model performed significantly better than a completely random model, but the share of wrongly allocated mileage, 70% of the total, remained high. However, the results of only one model were not sufficient to assess the procedure. The differences between two submodels, one with and one without public transport, regarding the distribution of the residuals indicated that model specification has a significant influence on performance. Therefore, more work on forecasting additional MDCEV models was necessary to have a basis for comparison. We compared two further MDCEV models to obtain a fuller understanding of their performance.

Tourism participation and expenditure behaviour: Analysis using a scobit based discrete–continuous choice model

Using a new type of discrete–continuous choice model, this paper simultaneously models two interrelated tourist choices, namely, tourism participation and tourism expenditure. For the analysis, we employ a scobit model, which includes a skewness parameter to relax the assumption that sensitivity to changes in the explanatory variables is highest among individuals with indifferent preferences concerning participation and non-participation in tourism. We undertake the empirical analysis using data collected in Japan. The results confirm the interdependency between tourism participation and tourism expenditure and that the scobit model is superior to the logit model in modelling these tourism-related decisions. We also discuss the main factors influencing both tourism participation and expenditure.

Modeling Household Fleet Choice as Function of Fuel Price by Using a Multiple Discrete–Continuous Choice Model

In this paper a new model of fleet choice for households uses the multiple discrete–continuous extreme value (MDCEV) model as a framework. The aim is to establish a model to allocate car types to activity-based microscopic agent-based transport simulations. What is new in the presented model is that choice is influenced by fuel price in addition to socioeconomic attributes of households. To model a range of fuel prices up to US$20/gal, a database from a sophisticated stated adaption survey about residential mobility choice in approximately 400 Swiss households was used. The model had a choice set of 17 alternatives distinguishing car type and drivetrain. In the MDCEV model, a household chooses multiple car types and distributes an overall budget of vehicle miles traveled to chosen alternatives. The model shows that fuel price has a much greater influence on the selection of the car type than on the use (vehicle miles traveled) of a car. In a certain range of fuel prices, households tend to switch from gasoline to diesel cars. When fuel prices become too high, alternative fuel technologies are considered.

Generalized extreme value (GEV)-based error structures for multiple discrete-continuous choice models

This paper formally derives the class of multiple discrete-continuous generalized extreme value (MDCGEV) models, a general class of multiple discrete-continuous choice models based on generalized extreme value (GEV) error specifications. Specifically, the paper proves the existence of, and derives the general form of, closed-form consumption probability expressions for multiple discrete-continuous choice models with GEV-based error structures. In addition to deriving the general form, the paper derives a compact and readily usable form of consumption probability expressions that can be used to estimate multiple discrete-continuous choice models with general cross-nested error structures. The cross-nested version of the MDCGEV model is applied to analyze household annual expenditure patterns in various transportation-related expenses using data from a Consumer Expenditure Survey in the United States. Model estimation results and predictive log-likelihood based validation tests indicate the superiority of the cross-nested model over the mutually exclusively nested and non-nested model specifications. Further, the cross-nested model was amenable to the accommodation of socio-demographic heterogeneity in inter-alternative covariance across decision-makers through a parameterization of the allocation parameters.

When Pavarotti Meets Harry Potter at the Super Bowl

This study aims to assess the magnitude of the interdependencies across leisure activities. Such interdependencies can be due not only to the time and budget constraints, but also to correlation in preferences across these activities as well as the need to pay travel costs for out-of-home activities.To capture these effects we introduce a multiple discrete-continuous choice model in which consumers have heterogeneous preferences over a latent attribute space and pricing is non-linear. The combination of multiple discrete-continuous choice with non-linear pricing makes the estimation challenging. We overcome this obstacle by using a powerful genetic algorithm in the estimation.Using structural estimation and individual level data on the allocation of time of Americans in 2003 we find that there are significant interdependencies across leisure activities and that travel costs as well as correlated preferences play an important role in creating them.These interdependencies have important implications to various strategic decisions such as pricing, bundling and mergers.

Analysis on Parking Pricing Policy with Discrete-Continuous Choice Model of Parking Location and Duration

我が国の都心部においては、依然として自動車交通量の増加による深刻な交通渋滞が問題となっている。特に、都心流入車両による駐車場入庫待ち行列や違法駐車、うろつき走行等の駐車行動により渋滞が発生するケースがしばしばみられる。そこで、本研究では，駐車行動をより適切に表現可能な行動モデルの構築を目指し、離散選択行動と連続量選択行動の相互依存関係を統一的に取り扱うことが可能な離散―連続モデルを、駐車時間と駐車場所の同時選択行動に適用した。特に、従来の一般的な推定方法におけるパラメータ推定値の不整合性を克服しつつ、選択肢別抽出データを用いてより適切にモデル構築を行うことを試みる。構築したモデルを用いて駐車料金施策の路上駐車削減効果を分析した結果、駐車場所および駐車時間選択行動を個別にモデル化する場合と比較して、詳細な分析を行うためには、離散―連続モデルに基づく駐車行動のモデル化が適切であることを示した。

A forecast of household ownership and use of alternative fuel vehicles: A multiple discrete-continuous choice approach

The paper analyzes how adding alternative fuel passenger cars to the market will affect patterns in demand for passenger cars. We use conjoint analysis and a multiple discrete-continuous choice model to estimate consumer preferences regarding alternative fuel vehicles, and based on the estimates we conduct a simulation to analyze changing rates of ownership and use of variously fueled passenger cars under the effect of the introduction of alternative fuel passenger cars. In addition, we estimate changes in overall fuel consumption and the emission of pollutants. The results show that gasoline-fueled cars will still be most consumers' first choice, but alternative fuel passenger cars will nevertheless compete and offer a substitute for the purchase and use of gasoline-fueled or diesel-fueled cars. Finally, results show that adding alternative fuel cars to the market would effectively lower gasoline and diesel fuel consumption and the emission of pollutants.

Reduced-Form Vs. Structural Models of Water Demand Under Non-Linear Prices

Increasing-block prices are common in markets for water, cellular phone service, and retail electricity. This study estimates demand models under block prices and conducts a Monte Carlo experiment to test the small-sample bias of structural and instrumental variables (IV) estimators. We estimate the price and income elasticity of water demand under increasing-block prices using a structural discrete/continuous choice (DCC) model, as well as random effects and IV. Elasticity estimates are sensitive to the modeling framework. The Monte Carlo experiment suggests that IV and DCC models estimate both price and income elasticity with bias, with no clear best choice among estimators.

Household Use of Agricultural Chemicals for Soil-Pest Management and Own Labor for Yard Work

In spite of its potential health and environmental risks and contribution to agribusiness, the use of agricultural chemicals for yard care has not been well studied. In our discrete-continuous choice model, estimated with data from a national survey, a household chooses how much money, if any, to initially spend on types of agricultural chemicals and applicators and how much time to subsequently spend on other yard work. Households in big cities or with large gardens are more likely to use organic chemicals. The probability that a household chooses a mix of do-it-yourself and hired applications of synthetic chemicals increases with income, age, and the presence of preschoolers. Among households that apply only synthetic chemicals without hired help, those with young children, with higher incomes, in big cities, and with male heads spend more on the chemicals. The time that such households spend on other yard work increases with expenditures on the chemicals. Cancellation of a pesticide registration might create an extra private cost for households with young children even though the ban might reduce external costs.

Reduced-Form Versus Structural Models of Water Demand Under Nonlinear Prices

Increasing-block prices are common in markets for water, cellular phone service, and retail electricity. This study estimates demand models under block prices and conducts a Monte Carlo experiment to test the small-sample bias of structural and instrumental variables (IV) estimators. We estimate the price and income elasticity of water demand under increasing-block prices using a structural discrete/continuous choice (DCC) model, as well as random effects and IV. Elasticity estimates are sensitive to the modeling framework. The Monte Carlo experiment suggests that IV and DCC models estimate both price and income elasticity with bias, with no clear best choice among estimators.

Competition for Exclusive Customers: Comparing Equilibrium and Welfare under One-Part and Two-Part Pricing

This paper compares one-part and two-part pricing in a discrete-continuous choice model, providing more extensive welfare results than prior literature. Under two-part pricing, firms may set fixed fees with or without unit-price commitment, where the lack of unit-price commitment is consistent with after-market monopolization. We find that two-part pricing with unit-price commitment is firms dominant unilateral and joint pricing policy. Two-part pricing without unit-price commitment is the least desirable policy from a welfare standpoint. Under appropriate conditions, one-part pricing produces the highest consumer and social welfare, but the lowest profits.

Price Competition for Exclusive Customers: A Discrete-Continuous Choice Model

This paper examines the tension between competition for the customer and competition in the market in a differentiated-product oligopoly. Consumers make purchases through an exclusive supply relationship that is modeled as a discrete-continuous choice problem. We characterize Bertrand-Nash equilibrium when firms set one-part or two-part price schedules. When firms commit to a two-part price schedule in advance of customers' selection of a supplier, equilibrium unit prices equal marginal costs and fixed fees obey an inverse elasticity rule. When firms cannot commit, bargain-then-ripoff pricing arises where unit prices are above marginal cost and fixed fees are possibly below customer-specific fixed costs. Two-part pricing with commitment yields higher profits - even compared to one-part pricing - provided access demand is log-concave in the fixed fee. One-part pricing, however, provides greater consumer and social welfare than two-part pricing without commitment. If usage demand is sufficiently price elastic, one-part pricing also results in greater consumer and social welfare, though less profit, than two-part pricing of either kind. Finally, when consumers differ in their usage demand, unit prices may be below marginal cost. Firms earn smaller margins on high-usage customers, in contrast to the usual monopoly result.

Energy Consumption for Space Heating: A Discrete–Continuous Approach

Energy demand for space heating is estimated using a discrete–continuous choice model which focuses on the relationship between the choice of heating equipment and energy consumption. The model is estimated on Norwegian micro data, and the two stages of the model are estimated simultaneously. The capital cost and the operating cost of the heating systems are both found to have a significant impact on the choice of heating system. Furthermore, the results show that household characteristics are important variables in residential energy models. Energy price elasticities and income elasticities are also estimated.

A Random- Utility-Based, Discrete-Continuous Choice Model of Domestic-Oversaes Travel That Accounts for Income Constraints

A discrete-continuous choice model system which predicts the durations and expenditures of an individual's domestic and international travel is presented in this study. This model system is composed of two sub-models based on the assumption of random-utility maximization under income constraints. Trade-offs between travel and the other types of consumption in resource allocation are taken into consideration in these sub-models. The parameters containedin the model system are estimated using women's expenditure and travel behavior data. The results indicate that; 1) there is a strong relationship between the individual's annual expenditure for domestic travel and that for international travel, and 2) the expenditures for domestic and international travel of working women are higher that those of non-working women.Changes in travel behavior due to changes in personal and household attributes are shown by Monte Carlo simulation using the model system.