IDEAS home Printed from https://ideas.repec.org/a/eee/jotrge/v16y2008i2p126-133.html
   My bibliography  Save this article

Combining RP and SP data: biases in using the nested logit ‘trick’ – contrasts with flexible mixed logit incorporating panel and scale effects

Author

Listed:
  • Hensher, David A.
  • Rose, John M.
  • Greene, William H.

Abstract

It has become popular practice that joint estimation of choice models that use stated preference (SP) and revealed preference (RP) data requires a way of adjusting for scale to ensure that parameter estimates across data sets are not confounded by differences in scale. The nested logit ‘trick’ presented by Hensher and Bradley in 1993 [Hensher, D.A., Bradley, M., 1993. Using stated response data to enrich revealed preference discrete choice models. Marketing Letters 4 (2), 139–152] continues to be widely used, especially by practitioners, to accommodate scale differences. This modelling strategy has always assumed that the observations are independent, a condition of all GEV models, which is not strictly valid within a stated preference experiment with repeated choice sets and between each SP observation and the single RP data point. This paper promotes the replacement of the NL ‘trick’ method with an error components model that can accommodate correlated observations as well as reveal the relevant scale parameter for subsets of alternatives. Such a model can also incorporate “state” or reference dependence between data types and preference heterogeneity on observed attributes. An example illustrates the difference in empirical evidence.

Suggested Citation

  • Hensher, David A. & Rose, John M. & Greene, William H., 2008. "Combining RP and SP data: biases in using the nested logit ‘trick’ – contrasts with flexible mixed logit incorporating panel and scale effects," Journal of Transport Geography, Elsevier, vol. 16(2), pages 126-133.
    • Handle: RePEc:eee:jotrge:v:16:y:2008:i:2:p:126-133
    DOI: 10.1016/j.jtrangeo.2007.07.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0966692307000737
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jtrangeo.2007.07.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Greene, William H. & Hensher, David A., 2007. "Heteroscedastic control for random coefficients and error components in mixed logit," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(5), pages 610-623, September.
    2. Brownstone, David & Bunch, David S. & Train, Kenneth, 2000. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 34(5), pages 315-338, June.
    3. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, July.
    4. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    5. Brownstone, David & Bunch, David S. & Golob, Thomas F. & Ren, Weiping, 1996. "A Transaction Choice Model for Forecasting Demand for Alternative-Fuel Vehicles," University of California Transportation Center, Working Papers qt0244r8g2, University of California Transportation Center.
    6. Bhat, Chandra R., 2003. "Simulation estimation of mixed discrete choice models using randomized and scrambled Halton sequences," Transportation Research Part B: Methodological, Elsevier, vol. 37(9), pages 837-855, November.
    7. Bhat, Chandra R. & Castelar, Saul, 2002. "A unified mixed logit framework for modeling revealed and stated preferences: formulation and application to congestion pricing analysis in the San Francisco Bay area," Transportation Research Part B: Methodological, Elsevier, vol. 36(7), pages 593-616, August.
    8. Brownstone, David & Bunch, David S & Golob, Thomas F & Ren, Weiping, 1996. "A Transactions Choice Model for Forecasting Demand for Alternative-Fuel Vehicles," University of California Transportation Center, Working Papers qt3sm7w9zk, University of California Transportation Center.
    9. David A. Hensher, 2006. "How do respondents process stated choice experiments? Attribute consideration under varying information load," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 861-878.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hensher, David A., 2008. "Empirical approaches to combining revealed and stated preference data: Some recent developments with reference to urban mode choice," Research in Transportation Economics, Elsevier, vol. 23(1), pages 23-29, January.
    2. Martin Achtnicht, 2012. "German car buyers’ willingness to pay to reduce CO 2 emissions," Climatic Change, Springer, vol. 113(3), pages 679-697, August.
    3. Bhat, Chandra R. & Sen, Sudeshna & Eluru, Naveen, 2009. "The impact of demographics, built environment attributes, vehicle characteristics, and gasoline prices on household vehicle holdings and use," Transportation Research Part B: Methodological, Elsevier, vol. 43(1), pages 1-18, January.
    4. Fosgerau, Mogens & Bierlaire, Michel, 2007. "A practical test for the choice of mixing distribution in discrete choice models," Transportation Research Part B: Methodological, Elsevier, vol. 41(7), pages 784-794, August.
    5. Paleti, Rajesh, 2018. "Generalized multinomial probit Model: Accommodating constrained random parameters," Transportation Research Part B: Methodological, Elsevier, vol. 118(C), pages 248-262.
    6. Deka, Devajyoti & Carnegie, Jon, 2021. "Predicting transit mode choice of New Jersey workers commuting to New York City from a stated preference survey," Journal of Transport Geography, Elsevier, vol. 91(C).
    7. Kim, Junghun & Seung, Hyunchan & Lee, Jongsu & Ahn, Joongha, 2020. "Asymmetric preference and loss aversion for electric vehicles: The reference-dependent choice model capturing different preference directions," Energy Economics, Elsevier, vol. 86(C).
    8. Stephane Hess & John W. Polak, 2004. "An analysis of parking behaviour using discrete choice models calibrated on SP datasets," ERSA conference papers ersa04p60, European Regional Science Association.
    9. Daina, Nicolò & Sivakumar, Aruna & Polak, John W., 2017. "Modelling electric vehicles use: a survey on the methods," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 447-460.
    10. Ladenburg, Jacob & Olsen, Søren Bøye, 2014. "Augmenting short Cheap Talk scripts with a repeated Opt-Out Reminder in Choice Experiment surveys," Resource and Energy Economics, Elsevier, vol. 37(C), pages 39-63.
    11. Ricardo A. Daziano & Martin Achtnicht, 2014. "Forecasting Adoption of Ultra-Low-Emission Vehicles Using Bayes Estimates of a Multinomial Probit Model and the GHK Simulator," Transportation Science, INFORMS, vol. 48(4), pages 671-683, November.
    12. Bliemer, Michiel C.J. & Rose, John M., 2010. "Construction of experimental designs for mixed logit models allowing for correlation across choice observations," Transportation Research Part B: Methodological, Elsevier, vol. 44(6), pages 720-734, July.
    13. Eran Ben-Elia & Robert Ishaq & Yoram Shiftan, 2013. "“If only I had taken the other road...”: Regret, risk and reinforced learning in informed route-choice," Transportation, Springer, vol. 40(2), pages 269-293, February.
    14. Achtnicht, Martin & Bühler, Georg & Hermeling, Claudia, 2008. "Impact of Service Station Networks on Purchase Decisions of Alternative-fuel Vehicles," ZEW Discussion Papers 08-088, ZEW - Leibniz Centre for European Economic Research.
    15. Hess, Stephane & Train, Kenneth E., 2011. "Recovery of inter- and intra-personal heterogeneity using mixed logit models," Transportation Research Part B: Methodological, Elsevier, vol. 45(7), pages 973-990, August.
    16. Hidrue, Michael K. & Parsons, George R. & Kempton, Willett & Gardner, Meryl P., 2011. "Willingness to pay for electric vehicles and their attributes," Resource and Energy Economics, Elsevier, vol. 33(3), pages 686-705, September.
    17. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    18. Rose, John M. & Hensher, David A. & Caussade, Sebastian & Ortúzar, Juan de Dios & Jou, Rong-Chang, 2009. "Identifying differences in willingness to pay due to dimensionality in stated choice experiments: a cross country analysis," Journal of Transport Geography, Elsevier, vol. 17(1), pages 21-29.
    19. Train, Kenneth & Wilson, Wesley W., 2008. "Estimation on stated-preference experiments constructed from revealed-preference choices," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 191-203, March.
    20. Nobuyuki Ito & Kenji Takeuchi & Shunsuke Managi, 2012. "Willingness to pay for the infrastructure investments for alternative fuel vehicles," Discussion Papers 1207, Graduate School of Economics, Kobe University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jotrge:v:16:y:2008:i:2:p:126-133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-transport-geography .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.