Journal article
Pooling stated and revealed preference data in the presence of RP endogeneity
Transportation research. Part B: methodological, v 109
01 Mar 2018
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Pooled discrete choice models combine revealed preference (RP) data and stated preference (SP) data to exploit advantages of each. SP data is often treated with suspicion because consumers may respond differently in a hypothetical survey context than they do in the marketplace. However, models built on RP data can suffer from endogeneity bias when attributes that drive consumer choices are unobserved by the modeler and correlated with observed variables. Using a synthetic data experiment, we test the performance of pooled RP-SP models in recovering the preference parameters that generated the market data under conditions that choice modelers are likely to face, including (1) when there is potential for endogeneity problems in the RP' data, such as omitted variable bias, and (2) when consumer willingness to pay for attributes may differ from the survey context to the market context. We identify situations where pooling RP and SP data does and does not mitigate each data source's respective weaknesses. We also show that the likelihood ratio test, which has been widely used to determine whether pooling is statistically justifiable, (1) can fail to identify the case where SP context preference differences and RP endogeneity bias shift the parameter estimates of both models in the same direction and magnitude and (2) is unreliable when the product attributes are fixed within a small number of choice sets, which is typical of automotive RP data. Our findings offer new insights into when pooling data sources may or may not be advisable for accurately estimating market preference parameters, including consideration of the conditions and context under which the data were generated as well as the relative balance of information between data sources. (C) 2018 Elsevier Ltd. All rights reserved.
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Details
- Title
- Pooling stated and revealed preference data in the presence of RP endogeneity
- Creators
- John Paul Helveston - Boston UniversityElea McDonnell Feit - Drexel UniversityJeremy J. Michalek - Carnegie Mellon Univ, Dept Mech Engn, 5000 Forbes Ave, Pittsburgh, PA 15213 USA
- Publication Details
- Transportation research. Part B: methodological, v 109
- Publisher
- Elsevier
- Number of pages
- 20
- Grant note
- Link Foundation Ford Motor Company 1064241 / National Science Foundation; National Science Foundation (NSF)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Marketing
- Web of Science ID
- WOS:000427332300004
- Scopus ID
- 2-s2.0-85058891071
- Other Identifier
- 991019189192104721
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InCites Highlights
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics
- Engineering, Civil
- Operations Research & Management Science
- Transportation
- Transportation Science & Technology