The Multiple Discrete-Continuous Extreme Value (MDCEV) Model: Role of Utility Function Parameters, Identification Considerations, and Model Extensions

Bhat, Chandra R.

The Multiple Discrete-Continuous Extreme Value (MDCEV) Model: Role of Utility Function Parameters, Identification Considerations, and Model Extensions

dc.creator	Bhat, Chandra R.	en
dc.date.accessioned	2014-04-04T17:49:32Z	en
dc.date.available	2014-04-04T17:49:32Z	en
dc.date.issued	2008	en
dc.description.abstract	Many consumer choice situations are characterized by the simultaneous demand for multiple alternatives that are imperfect substitutes for one another. A simple and parsimonious Multiple Discrete-Continuous Extreme Value (MDCEV) econometric approach to handle such multiple discreteness was formulated by Bhat (2005) within the broader Kuhn-Tucker (KT) multiple discrete-continuous economic consumer demand model of Wales and Woodland (1983). This paper examines several issues associated with the MDCEV model and other extant KT multiple discrete-continuous models. Specifically, the paper proposes a new utility function form that enables clarity in the role of each parameter in the utility specification, presents identification considerations associated with both the utility functional form as well as the stochastic nature of the utility specification, extends the MDCEV model to the case of price variation across goods and to general error covariance structures, discusses the relationship between earlier KT-based multiple discrete-continuous models, and illustrates the many technical nuances and identification considerations of the multiple discrete-continuous model structure through empirical examples. The paper also highlights the technical problems associated with the stochastic specification used in the KT-based multiple discrete-continuous models formulated in recent Environmental Economics papers.	en
dc.description.department	Civil, Architectural, and Environmental Engineering	en
dc.identifier.citation	Bhat, C.R. (2008). The Multiple Discrete-Continuous Extreme Value (MDCEV) Model: Role of Utility Function Parameters, Identification Considerations, and Model Extensions. Transportation Research Part B, Vol. 42, No. 3, pp. 274-303.	en
dc.identifier.issn	0191-2615	en
dc.identifier.uri	http://hdl.handle.net/2152/23829	en
dc.language.iso	en	en
dc.publisher	Elsevier	en
dc.source.uri	http://www.sciencedirect.com/science/journal/01912615	en
dc.subject	discrete-continuous system	en
dc.subject	multiple discreteness	en
dc.subject	Kuhn-Tucker demand systems	en
dc.subject	mixed discrete choice	en
dc.subject	random utility maximization	en
dc.title	The Multiple Discrete-Continuous Extreme Value (MDCEV) Model: Role of Utility Function Parameters, Identification Considerations, and Model Extensions	en
dc.type	Article	en