Change of Scale and Forecasting with the Control-Function Method in Logit Models
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Ben-Akiva_Change of scale.pdf
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be2ce75623b15307beb88db338f0f46d
Author(s)
Guevara, Cristian Angelo
Ben-Akiva, Moshe E.
Date Issued
August 2012
Journal
Transportation Science
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)
Citation
Guevara, C. A., and M. E. Ben-Akiva. “Change of Scale and Forecasting with the Control-Function Method in Logit Models.” Transportation Science 46.3 (2012): 425–437.
Version
Author's final manuscript
Abstract
Endogeneity is a model misspecification that precludes the consistent estimation of the model parameters. The control-function method is the most suitable tool to address endogeneity for several discrete choice models that are relevant in transportation research. However, the estimators obtained with the control-function method are consistent only up to a scale. In this paper, we first depict the determinants of this change of scale by adapting an existing result for omitted orthogonal attributes in logit models. Then, we study the problem of forecasting under these circumstances. We show that a procedure proposed in previous literature may lead to significant biases, and we suggest novel alternatives to be used with synthetic populations. We use Monte Carlo experimentation and real data on residential location choice to illustrate these results. The paper finishes by summarizing the findings of this investigation and suggesting future lines of research in this area.
MIT Department
Massachusetts Institute of Technology. Department of Civil and Environmental Engineering
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
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DOI of Published Version
https://doi.org/10.1287/trsc.1110.0404
