A polarized logit model (2013)

Title

A polarized logit model

Publication Type

Journal Article

Year of Publication

2013

Authors

Louis de Grange, Felipe González, Ignacio Vargas, Juan Carlos Muñoz

Journal Title

Transportation Research Part A: Policy and Practice

Keywords

Maximum entropy; Quadratic constraint; Logit model; Fixed point; Endogeneity; Prediction

Abstract

A novel logit-type discrete choice model is presented whose distinctive characteristic is that it “polarizes” or forces the prediction of choice probabilities towards values of 0 or 1. In real-world empirical tests this property enabled the new formulation, which we call the polarized logit model (PLM), to outperform the predictive capacity of other classical discrete choice models. The PLM is derived from the optimality conditions of a maximum entropy optimization model with linear and quadratic constraints. These conditions yield a fixed-point logit probability function that exhibits endogeneity, which is corrected for using instrumental variables so that the model’s parameters can be estimated. The PLM’s marginal substitution rates are similar to those of the traditional logit models.

DOI

10.1016/j.tra.2013.06.003

Corresponding Author

Juan Carlos Muñoz, Email: jcm@ing.puc.cl

Line (s) of Research

Access and Mobility