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A Warning on the Use of Linear Logit Models in Transport Mode Choice Studies

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  • Tae Hoon Oum

Abstract

This article argues that linear logit models are inappropriate to use for transport demand studies, because they impose many rigid a priori restrictions on the parameters of price responsiveness of demand, such as the elasticities of substitution and cross price elasticities, and the structure of technology (or preference) underlying the linear logit models has severe irregularity and inconsistency. This has a serious implication for the credibility of the findings of several recent studies which attempted to measure the welfare loss of traffic misallocation attributable to the Interstate Commerce Commission's railroad minimum rate regulation.

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  • Tae Hoon Oum, 1979. "A Warning on the Use of Linear Logit Models in Transport Mode Choice Studies," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 374-388, Spring.
    • Handle: RePEc:rje:bellje:v:10:y:1979:i:spring:p:374-388
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    Cited by:

    1. Wilson, William W., 1984. "Estimation Of Modal Demand Elasticities In Grain Transportation," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(2), pages 1-15, December.
    2. Jesse, Edward V. & Johnson, Aaron C. Jr., 1981. "A Proposed Monitoring System For Detecting Violations Of Capper-Volstead, Section 2," 1981 Annual Meeting, July 26-29, Clemson, South Carolina 279300, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. K E Haynes & F Y Phillips, 1982. "Constrained Minimum Discrimination Information: A Unifying Tool for Modeling Spatial and Individual Choice Behavior," Environment and Planning A, , vol. 14(10), pages 1341-1354, October.
    4. Tae H. Oum & Waters, W.G. & Jong Say Yong, 1990. "A survey of recent estimates of price elasticities of demand for transport," Policy Research Working Paper Series 359, The World Bank.
    5. Brockett, Patrick L. & Charnes, Abraham & Cooper, William W. & Learner, David & Phillips, Fred Y., 1995. "Information theory as a unifying statistical approach for use in marketing research," European Journal of Operational Research, Elsevier, vol. 84(2), pages 310-329, July.
    6. Feng, Bo & Mao, Zhaofang & Li, Hui, 2021. "Choices for competing service providers with heterogeneous customers: Traditional versus opaque sales modes," Omega, Elsevier, vol. 98(C).
    7. Wilson, Wiliam W., 1980. "Estimation of Grain Transportation Demand Using Time Series Data," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 278871, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Gerard Jong & Inge Vierth & Lori Tavasszy & Moshe Ben-Akiva, 2013. "Recent developments in national and international freight transport models within Europe," Transportation, Springer, vol. 40(2), pages 347-371, February.

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