TY - JOUR
T1 - Accommodating multiple constraints in the multiple discrete-continuous extreme value (MDCEV) choice model
AU - Castro, Marisol
AU - Bhat, Chandra R.
AU - Pendyala, Ram
AU - Jara-Díaz, Sergio R.
N1 - Funding Information:
The research in this paper was undertaken as part of a collaborative effort supported by the Time Use Observatory (TUO) initiative coordinated by the University of Chile. This research was also partially funded by Conicyt and its program Becas Chile. The authors are grateful to Lisa Macias for her help in formatting this document. Three anonymous referees provided valuable comments on an earlier version of this paper.
PY - 2012/7
Y1 - 2012/7
N2 - Multiple-discrete continuous choice models formulated and applied in recent years consider a single linear resource constraint, which, when combined with consumer preferences, determines the optimal consumption point. However, in reality, consumers face multiple resource constraints such as those associated with time, money, and capacity. Ignoring such multiple constraints and instead using a single constraint can, and in general will, lead to poor data fit and inconsistent preference estimation, which can then have a serious negative downstream effect on forecasting and welfare/policy analysis.In this paper, we extend the multiple-discrete continuous extreme value (MDCEV) model to accommodate multiple constraints. The formulation uses a flexible and general utility function form, and is applicable to the case of complete demand systems as well as incomplete demand systems. The proposed MC-MDCEV model is applied to time-use decisions, where individuals are assumed to maximize their utility from time-use in one or more activities subject to monetary and time availability constraints. The sample for the empirical exercise is generated by combining time-use information from the 2008 American Time Use Survey and expenditure records from the 2008 US Consumer Expenditure Survey. The estimation results show that preferences can get severely mis-estimated, and the data fit can degrade substantially, when only a subset of active resource constraints is used.
AB - Multiple-discrete continuous choice models formulated and applied in recent years consider a single linear resource constraint, which, when combined with consumer preferences, determines the optimal consumption point. However, in reality, consumers face multiple resource constraints such as those associated with time, money, and capacity. Ignoring such multiple constraints and instead using a single constraint can, and in general will, lead to poor data fit and inconsistent preference estimation, which can then have a serious negative downstream effect on forecasting and welfare/policy analysis.In this paper, we extend the multiple-discrete continuous extreme value (MDCEV) model to accommodate multiple constraints. The formulation uses a flexible and general utility function form, and is applicable to the case of complete demand systems as well as incomplete demand systems. The proposed MC-MDCEV model is applied to time-use decisions, where individuals are assumed to maximize their utility from time-use in one or more activities subject to monetary and time availability constraints. The sample for the empirical exercise is generated by combining time-use information from the 2008 American Time Use Survey and expenditure records from the 2008 US Consumer Expenditure Survey. The estimation results show that preferences can get severely mis-estimated, and the data fit can degrade substantially, when only a subset of active resource constraints is used.
KW - Consumer theory
KW - Multiple constraints
KW - Multiple discrete-continuous extreme value model
KW - Time use
KW - Travel demand
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U2 - 10.1016/j.trb.2012.02.005
DO - 10.1016/j.trb.2012.02.005
M3 - Article
AN - SCOPUS:84860888039
SN - 0191-2615
VL - 46
SP - 729
EP - 743
JO - Transportation Research Part B: Methodological
JF - Transportation Research Part B: Methodological
IS - 6
ER -