Transition choice probabilities and welfare analysis in random utility models with imperfect before–after correlation

Paolo Delle Site and Marco Valerio Salucci

Transportation Research Part B: Methodological, 2013, vol. 58, issue C, 215-242

Abstract: Welfare in random utility models is used to be analysed on the basis of only the expectation of the compensating variation. De Palma and Kilani (De Palma, A., Kilani, K., 2011. Transition choice probabilities and welfare analysis in additive random utility models. Economic Theory 46(3), 427–454) have developed a framework for conditional welfare analysis which provides analytic expressions of transition choice probabilities and associated welfare measures. The contribution is of practical relevance in transportation because it allows to compute shares of shifters and non-shifters and attribute benefits to them in a rigorous way. In De Palma and Kilani (2011) the usual assumption of unchanged random terms before and after is made.

Keywords: Random utility models; Transition probabilities; Compensating variation; Before–after correlation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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DOI: 10.1016/j.trb.2013.09.003

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