A new random utility model with flexible correlation pattern and closed-form covariance expression: The CoRUM

Andrea Papola

Transportation Research Part B: Methodological, 2016, vol. 94, issue C, 80-96

Abstract: This paper proposes a new random utility model characterised by a cumulative distribution function (cdf) obtained as a finite mixture of different cdfs. This entails that choice probabilities, covariances and elasticities of this model are also a finite mixture of choice probabilities, covariances and elasticities of the mixing models. As a consequence, by mixing nested logit cdfs, a model is generated with closed-form expressions for choice probabilities, covariances and elasticities and with, potentially, a very flexible correlation pattern. Importantly, the closed-form covariance expression opens up interesting application possibilities in some special choice contexts, like route choice, where prior expectations in terms of the covariance matrix can be formulated.

Keywords: Nested logit models; Mixing models; Closed-form correlation matrix (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:94:y:2016:i:c:p:80-96

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DOI: 10.1016/j.trb.2016.09.008

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