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Recovery of inter- and intra-personal heterogeneity using mixed logit models

Hess, S and Train, KE (2011) Recovery of inter- and intra-personal heterogeneity using mixed logit models. Transportation Research Part B: Methodological, 45 (7). 973 - 990 . ISSN 0191-2615

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Abstract

Most applications of discrete choice models in transportation now utilise a random coefficient specification, such as mixed logit, to represent taste heterogeneity. However, little is known about the ability of these models to capture the heterogeneity in finite samples (as opposed to asymptotically). Also, due to the computational intensity of the standard estimation procedures, several alternative, less demanding methods have been proposed, and yet the relative accuracy of these methods has not been investigated. This is especially true in the context of work looking at joint inter-respondent and intra-respondent variation. This paper presents an overview of the various different estimators, gives insights into some of the theoretical properties, and analyses their performance in a large scale study on simulated data. In particular, we specify 31 different forms of heterogeneity, with multiple versions of each dataset, and with results from over 16,000 mixed logit estimation runs. The findings suggest that variation in tastes over consumers is captured by all the methods, including the simpler versions, at least when sample size is sufficiently large. When tastes vary over choice situations for each consumer, as well as over consumers, the ability of the methods to capture and differentiate the two sources of heterogeneity becomes more tenuous. Only the most computationally intensive approach is able to capture adequately the two sources of variation, but at the cost of very high run times. Our results highlight the difficulty of retrieving taste heterogeneity with only cross-sectional data, providing further evidence of the benefits of repeated choice data. Our findings also suggest that the data requirements of random coefficients models may be more substantial than is commonly assumed, further reinforcing concerns about small sample issues.

Item Type: Article
Copyright, Publisher and Additional Information: © 2011 Elsevier. This is an author produced version of a paper subsequently published in Transportation Research Part B: Methodological. Uploaded in accordance with the publisher's self-archiving policy.
Keywords: Simulation-based estimation, Approximation, Random taste heterogeneity, Mixed logit, Intra-respondent, Panel data, choice
Institution: The University of Leeds
Academic Units: The University of Leeds > Faculty of Environment (Leeds) > Institute for Transport Studies (Leeds)
Depositing User: Symplectic Publications
Date Deposited: 24 Nov 2011 10:53
Last Modified: 27 Jun 2014 13:30
Published Version: http://dx.doi.org/10.1016/j.trb.2011.05.002
Status: Published
Publisher: Elsevier B.V.
Refereed: Yes
Identification Number: 10.1016/j.trb.2011.05.002
URI: http://eprints.whiterose.ac.uk/id/eprint/43442

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