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The Impact of Space on the Application Of Discrete Choice Models

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  • Kingsley E. Haynes

    (George Mason University)

  • Stewart Fotheringham

    (State University of New York at Buffalo)

Abstract

In spatial analysis, the 1980's could be characterized as the decade of discrete choice modeling and, more generally, categorized data analysis. Subsequent to the pioneering work undertaken in economics, marketing and transportation, it was quickly recognized that most spatial decisions are discrete (for example, the selection of a city in which to live or a store at which to shop) and the discrete choice framework was adopted enthusiastically. One of the most popular statistical models for the analysis of discrete choices has been the multinomial logit model (MNL). In this paper we describe the added complexities space introduces into Discrete Choice Modeling and then discuss how they can be incorporated into the framework to produce more realistic spatial choice models. Our discussion is centered around the MNL model, because of its popularity, and on the role of the Independence from Irrelevant Alternatives (IIA) assumption which is shown to be a key factor in highlighting the differences between aspatial and spatial choice. We also demonstrate that in certain models where IIA is relaxed the subtleties of space are not captured sufficiently and that these subtleties can only be captured by developing models from spatial theory. Some promising beginnings in this direction are reported.

Suggested Citation

  • Kingsley E. Haynes & Stewart Fotheringham, 1990. "The Impact of Space on the Application Of Discrete Choice Models," The Review of Regional Studies, Southern Regional Science Association, vol. 20(2), pages 39-49, Spring.
    • Handle: RePEc:rre:publsh:v20:y:1990:i:2:p:39-49
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    References listed on IDEAS

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    2. Yu‐Lin Hsu & Gavin C. Reid, 2021. "Two‐stage decision‐making within the firm: Analysis and case studies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1355-1373, September.
    3. Siedschlag, Iulia & Smith, Donal & Turcu, Camelia & Zhang, Xiaoheng, 2013. "What determines the location choice of R&D activities by multinational firms?," Research Policy, Elsevier, vol. 42(8), pages 1420-1430.
    4. Ibeas, Ángel & Cordera, Ruben & dell’Olio, Luigi & Coppola, Pierluigi, 2013. "Modelling the spatial interactions between workplace and residential location," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 110-122.
    5. Arauzo Carod, Josep Maria & Coll Martínez, Eva & Turcu, Camelia, 2018. "Where New Creative Industries Locate? Evidence from French Departments," Working Papers 2072/307042, Universitat Rovira i Virgili, Department of Economics.
    6. Haase, Knut & Müller, Sven, 2013. "Management of school locations allowing for free school choice," Omega, Elsevier, vol. 41(5), pages 847-855.
    7. Sener, Ipek N. & Pendyala, Ram M. & Bhat, Chandra R., 2011. "Accommodating spatial correlation across choice alternatives in discrete choice models: an application to modeling residential location choice behavior," Journal of Transport Geography, Elsevier, vol. 19(2), pages 294-303.

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