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Unobserved heterogeneity in dynamic discrete choice models

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Abstract

Monte Carlo simulation methods are used to confirm the identifiability of discrete choice models in which unobserved heterogeneity is specified as a random effect and modelled using the nonparametric mass-points approach. This simulation analysis is also used to examine alternative strategies for the estimation of such models by using a quasi-Newton maximum- likelihood estimation procedure, given the apparent sensitivity of model identification to choice of starting values. A mass-point model approach is then applied to a dataset of repeated choice involving household shopping trips between three types of retail centre, and the results from this approach are compared with those obtained from a conventional cross-sectional multinomial logit choice model as well as to results from a model in which a parametric distribution (the Dirichlet) is used to model the unobserved heterogeneity.

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Article provided by Pion Ltd, London in its journal Environment and Planning A.

Volume (Year): 25 (1993)
Issue (Month): 4 (April)
Pages: 495-519
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Handle: RePEc:pio:envira:v:25:y:1993:i:4:p:495-519

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  1. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470. [Downloadable!]
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