Accommodating flexible substitution patterns in multi-dimensional choice modeling: Formulation and application to travel mode and departure time choice

The nested logit model has been used extensively to model multi-dimensional choice situations. A drawback of the nested logit model is that it does not allow choice alternatives to share common unobserved attributes along all the dimensions characterizing the multidimensional choice context. This paper formulates a mixed multinomial logit structure that accommodates unobserved correlation across both dimensions in a two-dimensional choice context. The mixed multinomial logit structure is parsimonious in the number of parameters to be estimated and is also relatively easy to estimate using simulation methods. The mixed multinomial logit model is applied to an analysis of travel mode and departure time choice for home-based social–recreational trips using data drawn from the 1990 San Francisco Bay Area household survey. The empirical results underscore the need to capture unobserved attributes along both the mode and departure time dimensions, both for improved data fit as well as for more realistic policy evaluations of transportation control measures.