Can scale and coefficient heterogeneity be separated in random coefficients models?

Stephane Hess () and John Rose ()

Transportation, 2012, vol. 39, issue 6, 1225-1239

Abstract: There is growing interest in the notion that a significant component of the heterogeneity retrieved in random coefficients models may actually relate to variations in absolute sensitivities, a phenomenon referred to as scale heterogeneity. As a result, a number of authors have tried to explicitly model such scale heterogeneity, which is shared across coefficients, and separate it from heterogeneity in individual coefficients. This direction of work has in part motivated the development of specialised modelling tools such as the G-MNL model. While not disagreeing with the notion that scale heterogeneity across respondents exists, this paper argues that attempts in the literature to disentangle scale heterogeneity from heterogeneity in individual coefficients in discrete choice models are misguided. In particular, we show how the various model specifications can in fact simply be seen as different parameterisations, and that any gains in fit obtained in random scale models are the result of using more flexible distributions, rather than an ability to capture scale heterogeneity. We illustrate our arguments through an empirical example and show how the conclusions from past work are based on misinterpretations of model results. Copyright Springer Science+Business Media, LLC. 2012

Keywords: Random scale; Discrete choice; Taste heterogeneity; Scale heterogeneity; Mixed logit (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (104)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11116-012-9394-9 (text/html)
Access to full text is restricted to subscribers.

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:kap:transp:v:39:y:2012:i:6:p:1225-1239

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11116/PS2

DOI: 10.1007/s11116-012-9394-9

Access Statistics for this article

Transportation is currently edited by Kay W. Axhausen

More articles in Transportation from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().