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A practical technique to estimate multinomial probit models in transportation

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Bolduc, Denis

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Abstract

The Multinomial Probit (MNP) formulation provides a very general framework to allow for inter-dependent alternatives in discrete choice analysis. Up until recently, its use was rather limited, mainly because of the computational difficulties associated with the evaluation of the choice probabilities which are multidimensional normal integrals. In recent years, the econometric estimation of Multinomial Probit models has greatly been focused on. Alternative simulation based approaches have been suggested and compared. Most approaches exploit a conventional estimation technique where easy to compute simulators replace the choice probabilities. For situations such as in transportation demand modelling where samples and choice sets are large, the existing literature clearly suggests the use of a maximum simulated likelihood (MSL) framework combined with a Geweke-Hajivassiliou-Keane (GHK) choice probability simulator. The present paper gives the computational details regarding the implementation of this practical estimation approach where the scores are computed analytically. This represents a contribution of the paper, because usually, numerical derivatives are used. The approach is tested on a 9-mode transportation choice model estimated with disaggregate data from Santiago, Chile. La formulation probit polytomique (MNP) permet d'analyser et de décrire de façon très flexible, le choix d'un individu parmi un ensemble de modalités inter-dépendantes. Les nombreux progrès effectués au cours des dernières années concernant l'estimation économétrique des modèles MNP, permet maintenant de contourner la problématique liée à l'évaluation d'intégrales normales multiples qui définissent les probabilités de sélection des modalités. Les diverses approches considérées exploitent généralement des simulateurs efficaces agissant comme substituts aux probabilités exactes de choix. Le simulateur ayant la faveur générale est le GHK, suggéré de façon indépendante par Geweke, Hajivassiliou et Keane. Pour les situations telles que généralement rencontrées dans le domaine des transports où les échantillons ainsi que les ensembles de choix sont de grande taille, la littérature suggère très clairement l'emploi d'une approche du maximum de vraisemblance utilisant le simulateur GHK pour approcher les probabilités de choix. Le présent article fournit les détails relatifs à l'utilisation de cette méthodologie dans un cadre du maximum de vraisemblance avec dériv ées analytiques. L'approche est ensuite testée sur un ensemble de données décrivant le choix entre neuf modes servant à relier le centre-ville de Santiago à des régions en périphérie.

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Article provided by Elsevier in its journal Transportation Research Part B: Methodological.

Volume (Year): 33 (1999)
Issue (Month): 1 (February)
Pages: 63-79
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Handle: RePEc:eee:transb:v:33:y:1999:i:1:p:63-79

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  2. Denis Bolduc, . "A Fast Maximum Simulated Likelihood Estimation Technique for NMP Models," Computing in Economics and Finance 1997 155, Society for Computational Economics. [Downloadable!]
  3. Claire Dujardin & Florence Goffette-Nagot, 2006. "Neighborhood Effects, Public Housing and Unemployment in France," ERSA conference papers ersa06p362, European Regional Science Association. [Downloadable!]
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  4. Joan L. Walker & Moshe Ben-Akiva & Denis Bolduc, 2007. "Identification of parameters in normal error component logit-mixture (NECLM) models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1095-1125. [Downloadable!]
  5. Breustedt, Gunnar & Muller-Scheessel, Jorg & Latacz-Lohmann, Uwe, 2008. "Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36771, Agricultural Economics Society. [Downloadable!]
  6. GRAMMIG, Joachim & HUJER, Reinhard & SCHEIDLER, Michael, 2001. "The econometrics of airline network management," CORE Discussion Papers 2001055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  7. Ziegler, Andreas R., 2001. "Simulated z-tests in multinomial probit models," ZEW Discussion Papers 01-53, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  8. Denis Bolduc & Lynda Khalaf & Clément Yélou, 2005. "Identification Robust Confidence Sets Methods for Inference on Parameter Ratios and their Application to Estimating Value-of-Time," Computing in Economics and Finance 2005 48, Society for Computational Economics. [Downloadable!]
  9. Axel Börsch-Supan & Moshe Ben-Akiva & Kenneth Train & Daniel McFadden, 2002. "Hybrid Choice Models: Progress and Challenges," MEA discussion paper series 02009, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
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