Normalization and correlation of crossnested logit models

By Emmanuel Abbe, Michel Bierlaire, Tomer Toledo. 2007

73 citations recorded by the source corpus.

Demand analysis is more and more critical in the transportation context. Discrete choice models methodology provide an appropriate framework to capture the behaviour of the actors of transportation systems and, consequently, to forecast the demand. Recently, the cross-nested logit (CNL) model has received significant attention in the literature to capture decisions such as mode choice (Vovsha, 1997), departure time choice (Small, 1987) and route choice (Vovsha and Bekhor, 1998). Its general structure is appealing. Indeed, this model has a closed form probability formula, and allows for a wide range of correlation structures to be modeled. As shown by Bierlaire (forthcoming), various instances of the Cross-Nested Logit (CNL) model have been proposed in the literature. They are more or less the same, some being more specific as they constrain some parameters to fixed values. The issue of normalization of these models is not easy in practice. We provide a detailed analysis of this problem, and show that the normalization proposed by Wen and Koppelman (2001) is indeed correct. We emphasize the relation between the parameters of the CNL and the Alternative Specific Constants. In the second part of the paper, we analyze the correlation structure of the CNL. We show that the conjecture by Papola (2004) is erroneous. In fact, Papola's result is based on the assumption that the relation between the underlying NL correlations and the overall CNL correlations is linear. We show in the paper that this relation is actually based on a maximum.e. This is particularly important in applications such as route choice analysis, where the correlation of the alternatives can be somehow obtained from the network topology. We illustrate our method on a simple example, where we compare the correct results with Papola's conjecture. For the covering abstract please see ITRD E135207.

Subfields: Economics and Econometrics, Management Science and Operations Research, Transportation

View Paper: https://www.semanticscholar.org/paper/241e9b90dfe7775a5814771c2cb192ba00775c2d

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Citations in the corpus

Accommodating Spatial Correlation Across Choice Alternatives in Discrete Choice Models: Application to Modeling Residential Location Choice Behavior (2011, background): “2 When 1=μ , 2 See also Marzano and Papola (2008) and Abbe et al. (2007) for discussions of the correlation structure for the GNL model. the generator function in Equation (1) collapses to that of the MNL model generator function, and the…”
A method of integrating correlation structures for a generalized recursive route choice model (2016, methodology): “Abbé et al. (2007) note that Papola’s approximation in (27) can overestimate the correlation in some cases and bias the choice probabilities provided by the CNL model.”