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ON FRONTIER SPECIFICATIONS FOR DISCRETE BINARY CHOICE ANALYSIS
Author(s) -
Viton Philip A.
Publication year - 1992
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1992.tb00187.x
Subject(s) - logit , frontier , econometrics , mixed logit , discrete choice , economics , function (biology) , value of time , value (mathematics) , binary logit model , binary number , logistic regression , mode (computer interface) , computer science , mathematics , statistics , travel time , engineering , arithmetic , archaeology , evolutionary biology , biology , transport engineering , history , operating system
. In estimating a discrete choice model one is actually estimating the parameters of a conditional indirect utility function. I explore the consequences of recognizing that this function is a maximum‐value (frontier) function. I formulate several frontier choice models and, using a pilot empirical study of transportation mode choice, compare the resulting estimates with those of the conventional logit specification. Most strikingly, it appears that the values of time implied by the frontier models are substantially below those of the logit model. This implies that policies designed to improve travel times may be of less value to consumers than is conventionally believed.