IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v139y2020icp429-454.html
   My bibliography  Save this article

Using a sequential latent class approach for model averaging: Benefits in forecasting and behavioural insights

Author

Listed:
  • Hancock, Thomas O.
  • Hess, Stephane
  • Daly, Andrew
  • Fox, James

Abstract

Despite the frequent use of model averaging in many disciplines from weather forecasting to health outcomes, it is not yet an idea often considered in travel behaviour or choice modelling. The idea behind model averaging is that a single model can be created by calculating contribution weights for a set of candidate models, depending on their relative performance, thus creating an ‘average’. There are different ways of doing this, with a clear distinction between looking at the overall performance of each model or by doing this at the level of individual agents or observations. In this paper, we demonstrate that a relatively straightforward adaptation of latent class models can be used for the latter approach and show how this can be an effective method for travel behaviour modelling. We identify two key opportunities for model averaging. The first is the situation where an analyst faces the difficult choice between a number of advanced models, all with some desirable properties. The second is the situation where advanced models cannot be used due to the size of the data and/or choice sets. Our tests demonstrate that in both cases, model averaging using a sequential latent class framework results in a consistent improvement in model fit for both estimation and in forecasting with subsets of validation samples. Additionally, we demonstrate that model averaging can be used to obtain more reliable elasticities and welfare measures by averaging across outputs obtained from the set of candidate models. In terms of actual implementation of model averaging, we present a simple expectation–maximisation (EM) algorithm which can deal with very large numbers of candidate models within the same model averaging structure, unlike the typical case with classical estimation approaches for latent class.

Suggested Citation

  • Hancock, Thomas O. & Hess, Stephane & Daly, Andrew & Fox, James, 2020. "Using a sequential latent class approach for model averaging: Benefits in forecasting and behavioural insights," Transportation Research Part A: Policy and Practice, Elsevier, vol. 139(C), pages 429-454.
  • Handle: RePEc:eee:transa:v:139:y:2020:i:c:p:429-454
    DOI: 10.1016/j.tra.2020.07.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856420306480
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.tra.2020.07.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Börjesson, Maria & Fosgerau, Mogens & Algers, Staffan, 2012. "Catching the tail: Empirical identification of the distribution of the value of travel time," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 378-391.
    2. Fosgerau, Mogens & Mabit, Stefan L., 2013. "Easy and flexible mixture distributions," Economics Letters, Elsevier, vol. 120(2), pages 206-210.
    3. Stephane Hess & Amanda Stathopoulos & Andrew Daly, 2012. "Allowing for heterogeneous decision rules in discrete choice models: an approach and four case studies," Transportation, Springer, vol. 39(3), pages 565-591, May.
    4. Jonathan H. Wright, 2009. "Forecasting US inflation by Bayesian model averaging," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 28(2), pages 131-144.
    5. Wan, Alan T.K. & Zhang, Xinyu & Wang, Shouyang, 2014. "Frequentist model averaging for multinomial and ordered logit models," International Journal of Forecasting, Elsevier, vol. 30(1), pages 118-128.
    6. Sloughter, J. McLean & Gneiting, Tilmann & Raftery, Adrian E., 2010. "Probabilistic Wind Speed Forecasting Using Ensembles and Bayesian Model Averaging," Journal of the American Statistical Association, American Statistical Association, vol. 105(489), pages 25-35.
    7. Hess, Stephane & Stathopoulos, Amanda, 2013. "A mixed random utility — Random regret model linking the choice of decision rule to latent character traits," Journal of choice modelling, Elsevier, vol. 9(C), pages 27-38.
    8. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
    9. Hess, Stephane & Daly, Andrew & Dekker, Thijs & Cabral, Manuel Ojeda & Batley, Richard, 2017. "A framework for capturing heterogeneity, heteroskedasticity, non-linearity, reference dependence and design artefacts in value of time research," Transportation Research Part B: Methodological, Elsevier, vol. 96(C), pages 126-149.
    10. Morales, Knashawn H. & Ibrahim, Joseph G. & Chen, Chien-Jen & Ryan, Louise M., 2006. "Bayesian Model Averaging With Applications to Benchmark Dose Estimation for Arsenic in Drinking Water," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 9-17, March.
    11. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
    12. Stathopoulos, Amanda & Hess, Stephane, 2012. "Revisiting reference point formation, gains–losses asymmetry and non-linear sensitivities with an emphasis on attribute specific treatment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1673-1689.
    13. Hess, Stephane & Palma, David, 2019. "Apollo: A flexible, powerful and customisable freeware package for choice model estimation and application," Journal of choice modelling, Elsevier, vol. 32(C), pages 1-1.
    14. Zhao, Shangwei & Zhou, Jianhong & Yang, Guangren, 2019. "Averaging estimators for discrete choice by M-fold cross-validation," Economics Letters, Elsevier, vol. 174(C), pages 65-69.
    15. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Smeele, Nicholas V.R. & Chorus, Caspar G. & Schermer, Maartje H.N. & de Bekker-Grob, Esther W., 2023. "Towards machine learning for moral choice analysis in health economics: A literature review and research agenda," Social Science & Medicine, Elsevier, vol. 326(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lu, Hui & Hess, Stephane & Daly, Andrew & Rohr, Charlene & Patruni, Bhanu & Vuk, Goran, 2021. "Using state-of-the-art models in applied work: Travellers willingness to pay for a toll tunnel in Copenhagen," Transportation Research Part A: Policy and Practice, Elsevier, vol. 154(C), pages 37-52.
    2. John Buckell & Vrinda Vasavada & Sarah Wordsworth & Dean A. Regier & Matthew Quaife, 2022. "Utility maximization versus regret minimization in health choice behavior: Evidence from four datasets," Health Economics, John Wiley & Sons, Ltd., vol. 31(2), pages 363-381, February.
    3. Hancock, Thomas O. & Broekaert, Jan & Hess, Stephane & Choudhury, Charisma F., 2020. "Quantum probability: A new method for modelling travel behaviour," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 165-198.
    4. Hess, Stephane & Daly, Andrew & Dekker, Thijs & Cabral, Manuel Ojeda & Batley, Richard, 2017. "A framework for capturing heterogeneity, heteroskedasticity, non-linearity, reference dependence and design artefacts in value of time research," Transportation Research Part B: Methodological, Elsevier, vol. 96(C), pages 126-149.
    5. Oyama, Yuki & Fukuda, Daisuke & Imura, Naoto & Nishinari, Katsuhiro, 2024. "Do people really want fast and precisely scheduled delivery? E-commerce customers' valuations of home delivery timing," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    6. Yuki Oyama & Daisuke Fukuda & Naoto Imura & Katsuhiro Nishinari, 2022. "E-commerce users' preferences for delivery options," Papers 2301.00666, arXiv.org, revised Aug 2023.
    7. Kim, Sung Hoo & Mokhtarian, Patricia L., 2023. "Finite mixture (or latent class) modeling in transportation: Trends, usage, potential, and future directions," Transportation Research Part B: Methodological, Elsevier, vol. 172(C), pages 134-173.
    8. Schmid, Basil & Becker, Felix & Axhausen, Kay W. & Widmer, Paul & Stein, Petra, 2023. "A simultaneous model of residential location, mobility tool ownership and mode choice using latent variables," Transportation Research Part A: Policy and Practice, Elsevier, vol. 178(C).
    9. Sanjana Hossain & Md. Sami Hasnine & Khandker Nurul Habib, 2021. "A latent class joint mode and departure time choice model for the Greater Toronto and Hamilton Area," Transportation, Springer, vol. 48(3), pages 1217-1239, June.
    10. Tinessa, Fiore & Marzano, Vittorio & Papola, Andrea, 2020. "Mixing distributions of tastes with a Combination of Nested Logit (CoNL) kernel: Formulation and performance analysis," Transportation Research Part B: Methodological, Elsevier, vol. 141(C), pages 1-23.
    11. Chorus, Caspar & van Cranenburgh, Sander & Dekker, Thijs, 2014. "Random regret minimization for consumer choice modeling: Assessment of empirical evidence," Journal of Business Research, Elsevier, vol. 67(11), pages 2428-2436.
    12. Haghani, Milad & Sarvi, Majid, 2018. "Hypothetical bias and decision-rule effect in modelling discrete directional choices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 361-388.
    13. Balogh, Péter & Török, Áron & Czine, Péter & Horváth, Péter, 2020. "A fogyasztói magatartás elemzése feltételes választási modellekkel - a mangalicakolbász példáján [Analysing consumer behaviour with conditional choice models, with Mangalica sausage as an example]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 474-494.
    14. Das, Deepjyoti & Bhaduri, Eeshan & Velaga, Nagendra R., 2023. "Modeling commuters’ preference towards sharing paratransit services," Transport Policy, Elsevier, vol. 143(C), pages 132-149.
    15. Gonzalez-Valdes, Felipe & Heydecker, Benjamin G. & Ortúzar, Juan de Dios, 2022. "Quantifying behavioural difference in latent class models to assess empirical identifiability: Analytical development and application to multiple heuristics," Journal of choice modelling, Elsevier, vol. 43(C).
    16. Sander Cranenburgh & Marco Kouwenhoven, 2021. "An artificial neural network based method to uncover the value-of-travel-time distribution," Transportation, Springer, vol. 48(5), pages 2545-2583, October.
    17. Elisa Borowski & Amanda Stathopoulos, 2022. "Protection or Peril of Following the Crowd in a Pandemic-Concurrent Flood Evacuation," Papers 2202.00229, arXiv.org.
    18. Dugstad, Anders & Brouwer, Roy & Grimsrud, Kristine & Kipperberg, Gorm & Lindhjem, Henrik & Navrud, Ståle, 2024. "Nature is ours! – Psychological ownership and preferences for wind energy," Energy Economics, Elsevier, vol. 129(C).
    19. Kazagli, Evanthia & de Lapparent, Matthieu, 2023. "A discrete choice modeling framework of heterogenous decision rules accounting for non-trading behavior," Journal of choice modelling, Elsevier, vol. 48(C).
    20. Chorus, Caspar & van Cranenburgh, Sander & Daniel, Aemiro Melkamu & Sandorf, Erlend Dancke & Sobhani, Anae & Szép, Teodóra, 2021. "Obfuscation maximization-based decision-making: Theory, methodology and first empirical evidence," Mathematical Social Sciences, Elsevier, vol. 109(C), pages 28-44.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:139:y:2020:i:c:p:429-454. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.