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Errors in variables in multinomial choice modeling: A simulation study applied to a multinomial logit model of travel mode choice

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  • Bhatta, Bharat P.
  • Larsen, Odd I.

Abstract

Modeling travel demand is a vital part of transportation planning and management. Level of service (LOS) attributes representing the performance of transportation system and characteristics of travelers including their households are major factors determining the travel demand. Information on actual choice and characteristics of travelers is obtained from a travel survey at an individual level. Since accurate measurement of LOS attributes such as travel time and cost components for different travel modes at an individual level is critical, they are normally obtained from network models. The network-based LOS attributes introduce measurement errors to individual trips thereby causing errors in variables problem in a disaggregate model of travel demand. This paper investigates the possible structure and magnitude of biases introduced to the coefficients of a multinomial logit model of travel mode choice due to random measurement errors in two variables, namely, access/egress time for public transport and walking and cycling distance to work. A model was set up that satisfies the standard assumptions of a multinomial logit model. This model was estimated on a data set from a travel survey on the assumption of correctly measured variables. Subsequently random measurement errors were introduced and the mean values of the parameters from 200 estimations were presented and compared with the original estimates. The key finding in this paper is that errors in variables result in biased parameter estimates of a multinomial logit model and consequently leading to poor policy decisions if the models having biased parameters are applied in policy and planning purposes. In addition, the paper discusses some potential remedial measures and identifies research topics that deserve a detailed investigation to overcome the problem. The paper therefore significantly contributes to bridge the gap between theory and practice in transport.

Suggested Citation

  • Bhatta, Bharat P. & Larsen, Odd I., 2011. "Errors in variables in multinomial choice modeling: A simulation study applied to a multinomial logit model of travel mode choice," Transport Policy, Elsevier, vol. 18(2), pages 326-335, March.
    • Handle: RePEc:eee:trapol:v:18:y:2011:i:2:p:326-335
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    4. F. J. Callado-Munoz & J. Gonzalez-Chapela & N. Utrero-Gonzalez, 2017. "Analysis of Variance in Household Financial Portfolio Choice: Evidence from Spain," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(5), pages 439-459, October.
    5. Peer, Stefanie & Knockaert, Jasper & Koster, Paul & Tseng, Yin-Yen & Verhoef, Erik T., 2013. "Door-to-door travel times in RP departure time choice models: An approximation method using GPS data," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 134-150.
    6. Stuart Donovan & Thomas de Graaff & Henri L.F. de Groot, 2023. "An inexact science: Accounting for measurement error and downward bias in mode and location choice models," Tinbergen Institute Discussion Papers 23-010/VIII, Tinbergen Institute.
    7. Zheng, Yan & Deng, Anxin & Yin, Zijuan & Li, Wenquan, 2024. "Assessing travelers’ preferences for online bus-hailing service across various travel distances: Insights from Chinese metropolitan areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 187(C).
    8. Díaz, Federico & Cantillo, Víctor & Arellana, Julian & Ortúzar, Juan de Dios, 2015. "Accounting for stochastic variables in discrete choice models," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 222-237.
    9. Zhengying Liu & Astrid Kemperman & Harry Timmermans, 2020. "Location Choice in the Context of Older Adults’ Leisure-Time Walking," IJERPH, MDPI, vol. 17(13), pages 1-15, July.
    10. Biswas, Mehek & Bhat, Chandra R. & Ghosh, Sulagna & Pinjari, Abdul Rawoof, 2024. "Choice models with stochastic variables and random coefficients," Journal of choice modelling, Elsevier, vol. 51(C).

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