IDEAS home Printed from https://ideas.repec.org/a/inm/ortrsc/v41y2007i2p195-205.html
   My bibliography  Save this article

Modeling Discrete Choices in the Presence of Inertia and Serial Correlation

Author

Listed:
  • Víctor Cantillo

    (Department of Civil Engineering, Universidad del Norte, Km. 5 Antigua Vía a Puerto Colombia, Barranquilla, Colombia)

  • Juan de Dios Ortúzar

    (Department of Transport Engineering and Logistics, Pontificia Universidad Católica de Chile, Cassila 306, Código 105, Santiago 22, Chile)

  • Huw C. W. L. Williams

    (School of City and Regional Planning, Cardiff University, Cardiff CF1 3YN, United Kingdom)

Abstract

The concept of habit or inertia in the context of (reluctance to) change in travel behavior has an important bearing on transport policy (e.g., how to break car use habits) and has remained an unresolved issue in demand modeling. Another major problem in modeling the response to policy measures is the potential correlation or dependence between the choices made by a given individual over time (i.e., serial correlation). The two phenomena are closely related. This paper discusses the effects of considering inertia and serial correlation on travel choices. We formulate a fairly general discrete choice model that incorporates randomly distributed inertia thresholds and allow for serial correlation. The inertia thresholds may also be a function of an individual’s socioeconomic characteristics and choice conditions. The model can be applied with panel data as well as with mixed revealed and stated preference data. We applied it to real and simulated data, confirming that if these phenomena exist in the population but are not considered, serious errors in model estimation and prediction may arise, especially in the case of large policy impacts.

Suggested Citation

  • Víctor Cantillo & Juan de Dios Ortúzar & Huw C. W. L. Williams, 2007. "Modeling Discrete Choices in the Presence of Inertia and Serial Correlation," Transportation Science, INFORMS, vol. 41(2), pages 195-205, May.
    • Handle: RePEc:inm:ortrsc:v:41:y:2007:i:2:p:195-205
    DOI: 10.1287/trsc.1060.0178
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/trsc.1060.0178
    Download Restriction: no
    File URL: https://libkey.io/10.1287/trsc.1060.0178?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. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    2. Swait, Joffre & Adamowicz, Wiktor & Bueren, Martin van, 2004. "Choice and temporal welfare impacts: incorporating history into discrete choice models," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 94-116, January.
    3. repec:cdl:uctcwp:qt0qv4q55r is not listed on IDEAS
    4. P.B. Goodwin, 1977. "Habit and Hysteresis in Mode Choice," Urban Studies, Urban Studies Journal Limited, vol. 14(1), pages 95-98, February.
    5. Armstrong, Paula & Garrido, Rodrigo & Ortúzar, Juan de Dios, 0. "Confidence intervals to bound the value of time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(2-3), pages 143-161, April.
    6. Chang, Gang-Len & Mahmassani, Hani S., 1988. "Travel time prediction and departure time adjustment behavior dynamics in a congested traffic system," Transportation Research Part B: Methodological, Elsevier, vol. 22(3), pages 217-232, June.
    7. C F Daganzo & Y Sheffi, 1982. "Multinomial Probit with Time-Series Data: Unifying State Dependence and Serial Correlation Models," Environment and Planning A, , vol. 14(10), pages 1377-1388, October.
    8. Smith, Martin D., 2005. "State dependence and heterogeneity in fishing location choice," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 319-340, September.
    9. Tommy Gärling & Kay Axhausen, 2003. "Introduction: Habitual travel choice," Transportation, Springer, vol. 30(1), pages 1-11, February.
    10. repec:cdl:uctcwp:qt86v0f7zh is not listed on IDEAS
    11. repec:bla:econom:v:47:y:1980:i:187:p:247-83 is not listed on IDEAS
    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. Donna, Javier D., 2018. "Measuring Long-Run Price Elasticities in Urban Travel Demand," MPRA Paper 90059, University Library of Munich, Germany.
    2. Massey, D. Matthew & Parsons, George R., 2007. "State Dependence and Long Term Site Capital in a Random Utility Model of Recreation Demand," National Center for Environmental Economics-NCEE Working Papers 280861, United States Environmental Protection Agency (EPA).
    3. Arriagada, Jacqueline & Prato, Carlo & Munizaga, Marcela, 2025. "Incorporating the inertia effect into a route choice model using fare transaction data from a large-scale public transport network," Transportation Research Part A: Policy and Practice, Elsevier, vol. 196(C).
    4. Lattarulo, Patrizia & Masucci, Valentino & Pazienza, Maria Grazia, 2019. "Resistance to change: Car use and routines," Transport Policy, Elsevier, vol. 74(C), pages 63-72.
    5. González, Rosa Marina & Marrero, Ángel Simón & Cherchi, Elisabetta, 2017. "Testing for inertia effect when a new tram is implemented," Transportation Research Part A: Policy and Practice, Elsevier, vol. 98(C), pages 150-159.
    6. Staus, Alexander, 2011. "Which household attitudes determine the store type choice for meat?," Journal of Retailing and Consumer Services, Elsevier, vol. 18(3), pages 224-234.
    7. repec:cdl:uctcwp:qt86v0f7zh is not listed on IDEAS
    8. Wiktor L. Adamowicz & Klaus Glenk & Jürgen Meyerhoff, 2014. "Choice modelling research in environmental and resource economics," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 27, pages 661-674, Edward Elgar Publishing.
    9. Yi, DongGyu, 2014. "Three studies on environmental valuation," ISU General Staff Papers 201401010800005065, Iowa State University, Department of Economics.
    10. Smith, Martin D., 2005. "State dependence and heterogeneity in fishing location choice," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 319-340, September.
    11. Michael P. Keane, 2013. "Panel data discrete choice models of consumer demand," Economics Papers 2013-W08, Economics Group, Nuffield College, University of Oxford.
    12. Elisabetta Cherchi & Francesco Manca, 2011. "Accounting for inertia in modal choices: some new evidence using a RP/SP dataset," Transportation, Springer, vol. 38(4), pages 679-695, July.
    13. Venkatesh Shankar & Pablo Azar & Matthew Fuller, 2008. "—: A Multicategory Brand Equity Model and Its Application at Allstate," Marketing Science, INFORMS, vol. 27(4), pages 567-584, 07-08.
    14. repec:cdl:itsdav:qt4v44b5qn is not listed on IDEAS
    15. Noah Gans & George Knox & Rachel Croson, 2007. "Simple Models of Discrete Choice and Their Performance in Bandit Experiments," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 383-408, December.
    16. Chen Zhou & Shrihari Sridhar & Rafael Becerril-Arreola & Tony Haitao Cui & Yan Dong, 2019. "Promotions as competitive reactions to recalls and their consequences," Journal of the Academy of Marketing Science, Springer, vol. 47(4), pages 702-722, July.
    17. David R. Bell & Jeongwen Chiang & V. Padmanabhan, 1999. "The Decomposition of Promotional Response: An Empirical Generalization," Marketing Science, INFORMS, vol. 18(4), pages 504-526.
    18. Edmond Daramy-Williams & Jillian Anable & Susan Grant-Muller, 2019. "Car Use: Intentional, Habitual, or Both? Insights from Anscombe and the Mobility Biography Literature," Sustainability, MDPI, vol. 11(24), pages 1-17, December.
    19. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    20. Yücel, Eda & Karaesmen, Fikri & Salman, F. Sibel & Türkay, Metin, 2009. "Optimizing product assortment under customer-driven demand substitution," European Journal of Operational Research, Elsevier, vol. 199(3), pages 759-768, December.
    21. Andrés Elberg & Pedro M. Gardete & Rosario Macera & Carlos Noton, 2019. "Dynamic effects of price promotions: field evidence, consumer search, and supply-side implications," Quantitative Marketing and Economics (QME), Springer, vol. 17(1), pages 1-58, March.
    22. Yu Ding & Wayne S. DeSarbo & Dominique M. Hanssens & Kamel Jedidi & John G. Lynch & Donald R. Lehmann, 2020. "The past, present, and future of measurement and methods in marketing analysis," Marketing Letters, Springer, vol. 31(2), pages 175-186, September.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:inm:ortrsc:v:41:y:2007:i:2:p:195-205. 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.