A SEMI-COMPENSATORY DISCRETE CHOICE MODEL WITH EXPLICIT ATTRIBUTE THRESHOLDS OF PERCEPTION

This paper formulates a semi-compensatory two-stage discrete choice model incorporating randomly distributed thresholds for attribute acceptance. The formulation allows the parameters of the threshold's probability distribution to be estimated. These parameters can be expressed as a function of the socioeconomic characteristics of the individual and the conditions under which the choice process takes place. Applying the model to real and simulated data allowed the authors to conclude that if thresholds exist in the population, the use of compensatory models such as multinomial logit or even mixed logit can lead to serious errors in model estimation and, therefore, in the computation of marginal rates of substitution such as the subjective value of time, as well as in prediction. Findings also suggest that the mixed logit model can deal with random parameters including differences in tastes, but was not able to represent the existence of non-compensatory behavior.

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  • English

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  • Accession Number: 00989117
  • Record Type: Publication
  • Files: TRIS, ATRI
  • Created Date: Apr 24 2005 12:00AM