Practical Method to Simulate Multiple Discrete-Continuous Generalized Extreme Value Model: Application to Examine Substitution Patterns of Household Transportation Expenditures

Ma, J and Ye, X and Pinjari, AR (2019) Practical Method to Simulate Multiple Discrete-Continuous Generalized Extreme Value Model: Application to Examine Substitution Patterns of Household Transportation Expenditures. In: Transportation Research Record, 2673 (8). pp. 145-156.

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Abstract

The multiple discrete-continuous generalized extreme value (MDCGEV) model has been derived from multivariate extreme value (MEV)-based stochastic specifications to relax the independence assumption in the multiple discrete-continuous extreme value (MDCEV) model. It is analogous to the situation where a generalized extreme value (GEV) model relaxes the same assumption in a multinomial logit (MNL) model. However, unlike the case of single discrete choice model where substitution patterns can be understood based on elasticity expressions for a change in the value of an explanatory variable, the MDCEV and its variants do not offer closed-form elasticity expressions. The predictions must be compared explicitly under the base case and policy case scenarios. To perform a prediction exercise with MDCEV or its variants, random samples have to be drawn from the relevant stochastic distributions, which is actually not a straightforward task. In this paper, a practical method is proposed for drawing from an MEV distribution and the method is demonstrated to examine substitution patterns in an MDCGEV model for household transportation expenditures. The empirical results show that the cross-elasticities of explanatory variables in the MDCGEV model exhibit more variations than those in MDCEV and multiple discrete-continuous nested extreme value (MDCNEV) models. © National Academy of Sciences: Transportation Research Board 2019.

Item Type:	Journal Article
Publication:	Transportation Research Record
Publisher:	SAGE Publications Ltd
Additional Information:	The copyright for this article belongs to SAGE Publications Ltd
Keywords:	Elasticity; Stochastic systems, Discrete choice models; Explanatory variables; Generalized extreme value; Independence assumption; Multiple discrete continuous extreme value models; Multivariate extremes; Stochastic distribution; Substitution patterns, Stochastic models
Department/Centre:	Division of Mechanical Sciences > Civil Engineering
Date Deposited:	09 Dec 2022 09:40
Last Modified:	09 Dec 2022 09:40
URI:	https://eprints.iisc.ac.in/id/eprint/78881

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