A Warning on the Use of Linear Logit Models in Transport Mode Choice Studies

Tae Hoon Oum

Bell Journal of Economics, 1979, vol. 10, issue 1, 374-388

Abstract: This article argues that linear logit models are inappropriate to use for transport demand studies, because they impose many rigid a priori restrictions on the parameters of price responsiveness of demand, such as the elasticities of substitution and cross price elasticities, and the structure of technology (or preference) underlying the linear logit models has severe irregularity and inconsistency. This has a serious implication for the credibility of the findings of several recent studies which attempted to measure the welfare loss of traffic misallocation attributable to the Interstate Commerce Commission's railroad minimum rate regulation.

Date: 1979
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