A Logit Model With Endogenous Explanatory Variables and Network Externalities
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Author(s)
de Grange, Louis
González, Felipe
Troncoso, Rodrigo
Vargas Olguin, Ignacio Javier
Date Issued
January 2015
Journal
Networks and Spatial Economics
Publisher
Springer US
Citation
de Grange, Louis et al. “A Logit Model With Endogenous Explanatory Variables and Network Externalities.” Networks and Spatial Economics 15.1 (2015): 89–116.
Version
Author's final manuscript
Abstract
A novel logit model is presented that explicitly includes endogeneity in explanatory variables whose values depend on individual choice decisions that involve network externalities or social interactions such as those impacting road congestion or public transport comfort and convenience. The proposed specification corrects for this particular type of endogeneity. The model is derived from a linearly constrained maximum entropy optimization problem that incorporates the network externalities or social interactions causing the endogeneity. It is validated through simulations and an application to a case of transport mode choice in a Chilean city using real data.
MIT Department
Massachusetts Institute of Technology. Department of Civil and Environmental Engineering
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1007/s11067-014-9271-5
