Linking discrete choice to continuous demand within the framework of a computable general equilibrium model

Truong Truong () and David Hensher

Transportation Research Part B: Methodological, 2012, vol. 46, issue 9, 1177-1201

Abstract: Discrete choice (DC) models are commonly used as basic building blocks in ‘bottom-up’ models which seek to describe consumer and producer behaviour at a disaggregate level, in contrast to continuous demand (CD) models which are used to describe behaviour at a more aggregate level. At a disaggregate level, choice behaviour is defined in terms of commodities differentiated by qualities or attributes. In contrast, aggregate demand behaviour is defined in terms of broadly defined and generically different commodities. In a DC model, the main focus of analysis is not the total quantity of demand, but rather the relative shares or substitution between the choice alternatives, in contrast to a continuous demand model where the focus is on the aggregate substitution between groups of commodities as well as on the income effects. Seen in this way, there is scope for complementary usage of DC and CD models within the framework of a CGE model where DC models are used to describe the preferences for a narrowly defined set of commodities belonging to a particular sector of an economy, and CD models are used to describe the interactions between these sectors. In this paper, we describe how DC and CD models can be used in such an integrated fashion in a spatial computable general equilibrium model to inquire into the wider economic impacts of a transport investment project in the Sydney Metropolitan Area.

Keywords: Bottom-up; Top-down; Discrete choice; Differentiated products; Continuous demand; Computable general equilibrium (CGE) models (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0191261512000859
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:46:y:2012:i:9:p:1177-1201

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.trb.2012.06.001

Access Statistics for this article

Transportation Research Part B: Methodological is currently edited by Fred Mannering

More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Catherine Liu ().