Economics, Econometrics and Finance
8 years ago

Choosing the wrong model could lead to unreliable forecasts!

IMPLICATIONS OF TASK COMPLEXITY FOR DISCRETE CHOICE ANALYSIS: A COMPARATIVE STUDY OF NESTED LOGIT AND PRETREE
Richard Batley

Paper Summary

The article compares two models, nested logit and PRETREE, to see how well they predict household demand for alternative-fuel vehicles. They found that using the wrong model can lead to significantly different results from reality. This raises concerns about the reliability of estimates and forecasts in many studies that use nested logit.

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