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A new flexible multiple discrete–continuous extreme value (MDCEV) choice model

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  • Bhat, Chandra R.
Abstract
Traditional multiple discrete–continuous (MDC) models generally predict the continuous consumption quantity component reasonably component well, but not necessarily the discrete choice component. In this paper, we propose, for the first time, a new flexible closed-form MDCEV model that breaks the tight linkage between the discrete and continuous choice dimensions of the traditional MDC models. We do so by (1) employing a linear utility function of consumption for the first outside good (which removes the continuous consumption quantity of the outside good from the discrete consumption decision, and also helps in forecasting), and (2) using separate baseline utilities for the discrete and continuous consumption decisions. In the process of proposing our new formulation, we also revisit two issues related to the traditional MDC model. The first relates to clarification regarding the identification of the scale parameter of the error terms, and the second relates to the probability of the discrete choice component of the traditional MDC model (that is, the multivariate probability of consumption or not of the alternatives). We show why the scale parameter of the error terms is indeed estimable when a γ-profile is used, as well as show how one may develop a closed-form expression for the discrete choice consumption probability. The latter contribution also presents a methodology to estimate pure multiple discrete choice models without the need for information on the continuous consumptions. Finally, we also develop forecasting procedures for our new MDC model structure.

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  • Bhat, Chandra R., 2018. "A new flexible multiple discrete–continuous extreme value (MDCEV) choice model," Transportation Research Part B: Methodological, Elsevier, vol. 110(C), pages 261-279.
    • Handle: RePEc:eee:transb:v:110:y:2018:i:c:p:261-279
    DOI: 10.1016/j.trb.2018.02.011
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    Cited by:

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    2. Tapia, Rodrigo J. & de Jong, Gerard & Larranaga, Ana M. & Bettella Cybis, Helena B., 2020. "Application of MDCEV to infrastructure planning in regional freight transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 133(C), pages 255-271.
    3. Han Yuan, 2020. "Competing for Time: A Study of Mobile Applications," 2020 Papers pyu309, Job Market Papers.
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    5. Pellegrini, Andrea & Pinjari, Abdul Rawoof & Maggi, Rico, 2021. "A multiple discrete continuous model of time use that accommodates non-additively separable utility functions along with time and monetary budget constraints," Transportation Research Part A: Policy and Practice, Elsevier, vol. 144(C), pages 37-53.
    6. Palma, David & Hess, Stephane, 2022. "Extending the Multiple Discrete Continuous (MDC) modelling framework to consider complementarity, substitution, and an unobserved budget," Transportation Research Part B: Methodological, Elsevier, vol. 161(C), pages 13-35.
    7. Niek Mouter & Paul Koster & Thijs Dekker, 2019. "An introduction to Participatory Value Evaluation," Tinbergen Institute Discussion Papers 19-024/V, Tinbergen Institute, revised 15 Dec 2019.
    8. Bhat, Chandra R. & Mondal, Aupal & Pinjari, Abdul Rawoof & Saxena, Shobhit & Pendyala, Ram M., 2022. "A multiple discrete continuous extreme value choice (MDCEV) model with a linear utility profile for the outside good recognizing positive consumption constraints," Transportation Research Part B: Methodological, Elsevier, vol. 156(C), pages 28-49.
    9. Thijs Dekker & Paul (P.R.) Koster & Niek Mouter, 2019. "The economics of participatory value evaluation," Tinbergen Institute Discussion Papers 19-008/VIII, Tinbergen Institute.
    10. Ozonder, Gozde & Miller, Eric J., 2021. "Longitudinal investigation of skeletal activity episode timing decisions – A copula approach," Journal of choice modelling, Elsevier, vol. 40(C).
    11. Mouter, Niek & Koster, Paul & Dekker, Thijs, 2021. "Contrasting the recommendations of participatory value evaluation and cost-benefit analysis in the context of urban mobility investments," Transportation Research Part A: Policy and Practice, Elsevier, vol. 144(C), pages 54-73.
    12. Saxena, Shobhit & Pinjari, Abdul Rawoof & Paleti, Rajesh, 2022. "A multiple discrete-continuous extreme value model with ordered preferences (MDCEV-OP): Modelling framework for episode-level activity participation and time-use analysis," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 259-283.
    13. Calastri, Chiara & Giergiczny, Marek & Zedrosser, Andreas & Hess, Stephane, 2023. "Modelling activity patterns of wild animals - An application of the multiple discrete-continuous extreme value (MDCEV) model," Journal of choice modelling, Elsevier, vol. 47(C).
    14. Rodrigo J. Tapia & Gerard Jong & Ana M. Larranaga & Helena B. Bettella Cybis, 2021. "Exploring Multiple‐discreteness in Freight Transport. A Multiple Discrete Extreme Value Model Application for Grain Consolidators in Argentina," Networks and Spatial Economics, Springer, vol. 21(3), pages 581-608, September.
    15. Bhat, Chandra R., 2022. "A new closed-form two-stage budgeting-based multiple discrete-continuous model," Transportation Research Part B: Methodological, Elsevier, vol. 164(C), pages 162-192.
    16. Palma, David & Calastri, Chiara & Pawlak, Jacek, 2023. "The role of time budgets in models of multi-tasking while travelling: A comparison between the MDCEV and eMDC approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    17. Morris, Eric A. & Blumenberg, Evelyn & Guerra, Erick, 2020. "Does lacking a car put the brakes on activity participation? Private vehicle access and access to opportunities among low-income adults," Transportation Research Part A: Policy and Practice, Elsevier, vol. 136(C), pages 375-397.
    18. Gutsche, Gunnar & Wetzel, Heike & Ziegler, Andreas, 2020. "How relevant are economic preferences and personality traits for individual sustainable investment behavior? A framed field experiment," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224542, Verein für Socialpolitik / German Economic Association.
    19. Saxena, Shobhit & Pinjari, Abdul Rawoof & Bhat, Chandra R., 2022. "Multiple discrete-continuous choice models with additively separable utility functions and linear utility on outside good: Model properties and characterization of demand functions," Transportation Research Part B: Methodological, Elsevier, vol. 155(C), pages 526-557.
    20. Pudāne, Baiba & van Cranenburgh, Sander & Chorus, Caspar G., 2021. "A day in the life with an automated vehicle: Empirical analysis of data from an interactive stated activity-travel survey," Journal of choice modelling, Elsevier, vol. 39(C).
    21. Wen Lin, 2023. "The effect of product quantity on willingness to pay: A meta‐regression analysis of beef valuation studies," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 646-663, July.
    22. Pougala, Janody & Hillel, Tim & Bierlaire, Michel, 2022. "Capturing trade-offs between daily scheduling choices," Journal of choice modelling, Elsevier, vol. 43(C).
    23. Saxena, Shobhit & Pinjari, Abdul Rawoof & Roy, Ananya & Paleti, Rajesh, 2021. "Multiple discrete-continuous choice models with bounds on consumptions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 149(C), pages 237-265.
    24. Mondal, Aupal & Bhat, Chandra R., 2021. "A new closed form multiple discrete-continuous extreme value (MDCEV) choice model with multiple linear constraints," Transportation Research Part B: Methodological, Elsevier, vol. 147(C), pages 42-66.

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