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Review and assessment of the nested logit model

Author

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  • Juan Antonio Carrasco
  • Juan de Dios Ortúzar

Abstract

The popular hierarchical or nested logit model that has been the recent source of heated discussions in the literature is reviewed and critically examined. The fundamental underpinnings of the model are first presented in a concise and easy-to-understand fashion and then used to assess each controversy in turn. Monte Carlo simulation is also used to examine some problems that are not possible to address by just resorting to the theory. The main conclusion is that all the model hypotheses are both essential and unambiguous and should not be ignored for a correct use of the model in practice.

Suggested Citation

  • Juan Antonio Carrasco & Juan de Dios Ortúzar, 2002. "Review and assessment of the nested logit model," Transport Reviews, Taylor & Francis Journals, vol. 22(2), pages 197-218, January.
    • Handle: RePEc:taf:transr:v:22:y:2002:i:2:p:197-218
    DOI: 10.1080/01441640110091224
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    References listed on IDEAS

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    1. Koppelman, Frank S. & Sethi, Vaneet & Wen, Chieh-hua, 2001. "Alternative nested logit models: a response to comments by Andrew Daly on an earlier paper of Frank Koppelman and Chieh-hua Wen," Transportation Research Part B: Methodological, Elsevier, vol. 35(8), pages 725-729, September.
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    Cited by:

    1. Bliemer, Michiel C.J. & Rose, John M. & Hensher, David A., 2009. "Efficient stated choice experiments for estimating nested logit models," Transportation Research Part B: Methodological, Elsevier, vol. 43(1), pages 19-35, January.
    2. Anna Maria Pinna & Rinaldo Brau & Vania Manuela Licio, 2016. "Broadening or jumping? An analysis of the first export market of European Union firms," Environment and Planning C, , vol. 34(4), pages 592-616, June.
    3. David Banister & Michael Browne & Moshe Givoni, 2010. "Transport Reviews—The 30-super-th Anniversary of the Journal," Transport Reviews, Taylor & Francis Journals, vol. 30(1), pages 1-10, January.
    4. Birolini, Sebastian & Cattaneo, Mattia & Malighetti, Paolo & Morlotti, Chiara, 2020. "Integrated origin-based demand modeling for air transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    5. Rinaldo Brau & Matteo Lippi Bruni, 2008. "Eliciting the demand for long‐term care coverage: a discrete choice modelling analysis," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 411-433, March.
    6. Lizana, Pedro & Ortúzar, Juan de Dios & Arellana, Julián & Rizzi, Luis I., 2021. "Forecasting with a joint mode/time-of-day choice model based on combined RP and SC data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 302-316.
    7. Batley, Richard & Hess, Stephane, 2016. "Testing for regularity and stochastic transitivity using the structural parameter of nested logit," Transportation Research Part B: Methodological, Elsevier, vol. 93(PA), pages 355-376.
    8. Bunch, David S. & Rocke, David M., 2016. "Variance-component-based nested logit specifications: Improved formulation, and practical microsimulation of random disturbance terms," Journal of choice modelling, Elsevier, vol. 21(C), pages 30-35.
    9. Mori, Kentaro & Miwa, Tomio & Abe, Ryosuke & Morikawa, Takayuki, 2022. "Equilibrium analysis of trip demand for autonomous taxi services in Nagoya, Japan," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 476-498.
    10. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    11. Haque, Md Bashirul & Choudhury, Charisma & Hess, Stephane, 2020. "Understanding differences in residential location preferences between ownership and renting: A case study of London," Journal of Transport Geography, Elsevier, vol. 88(C).
    12. Honora Smith & Christine Currie & Pornpimol Chaiwuttisak & Andreas Kyprianou, 2018. "Patient choice modelling: how do patients choose their hospitals?," Health Care Management Science, Springer, vol. 21(2), pages 259-268, June.
    13. Eldeeb, Gamal & Mohamed, Moataz & Páez, Antonio, 2021. "Built for active travel? Investigating the contextual effects of the built environment on transportation mode choice," Journal of Transport Geography, Elsevier, vol. 96(C).
    14. Han, Yan & Zhang, Tiantian & Wang, Meng, 2020. "Holiday travel behavior analysis and empirical study with Integrated Travel Reservation Information usage," Transportation Research Part A: Policy and Practice, Elsevier, vol. 134(C), pages 130-151.

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