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Model combination for capturing the inconsistency in the aggregate prediction
KTH, School of Architecture and the Built Environment (ABE), Transport Science, System Analysis and Economics.ORCID iD: 0000-0002-6839-8540
KTH, School of Architecture and the Built Environment (ABE), Centres, Centre for Transport Studies, CTS. KTH, School of Architecture and the Built Environment (ABE), Transport Science.ORCID iD: 0000-0002-5410-3959
KTH, School of Architecture and the Built Environment (ABE), Centres, Centre for Transport Studies, CTS. KTH, School of Architecture and the Built Environment (ABE), Transport Science.ORCID iD: 0000-0001-5290-6101
(English)Manuscript (preprint) (Other academic)
Abstract [en]

What is the appropriate aggregation level for modeling when the purpose of modelingis aggregate prediction: is it to estimate a disaggregate model and aggregateindividual predictions or estimate an aggregate model for the aggregate prediction?There is no unique answer to this old question in the literature as well as no generalmethodology to address the problem. In this paper, we propose to tackle theaggregation problem by employing and developing model combination methods tocombine aggregate and disaggregate models. Dierent aspects of aggregation arecovered in this paper: aggregation over time, individuals and alternatives. We examinethe eect of aggregation on the prediction accuracy of a nested multinomiallogit (NMNL). The application of interest is to predict the monthly share of cleancars in the Swedish car eet. We investigate a situation wherein the large scalemodels are already estimated, and we are interested in improving their predictionperformance in a post-processing manner. We combine NMNL with a regressiontree to capture individual heterogeneity as well as a time-series model to capturedynamics of the market share of clean cars at the aggregate level. Models are combinedthrough a latent variable model and a Bayesian model averaging approach.We propose aggregate likelihood as the likelihood to be maximized for the modelselection and combination when the purpose of modeling is aggregate prediction.The results show the increase in the predictive power of combined models.

Keywords [en]
model combination, aggregation, logit models, prediction, latent variable models, Bayesian model averaging, nite mixture model
National Category
Social Sciences
Identifiers
URN: urn:nbn:se:kth:diva-180342OAI: oai:DiVA.org:kth-180342DiVA, id: diva2:892927
Note

QS 2016

Available from: 2016-01-11 Created: 2016-01-11 Last updated: 2022-10-24Bibliographically approved
In thesis
1. Prediction-driven approaches to discrete choicemodels with application to forecasting car typedemand
Open this publication in new window or tab >>Prediction-driven approaches to discrete choicemodels with application to forecasting car typedemand
2016 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Models that can predict consumer choices are essential technical support fordecision makers in many contexts. The focus of this thesis is to address predictionproblems in discrete choice models and to develop methods to increase the predictivepower of these models with application to car type choice. In this thesis we challengethe common practice of prediction that is using statistical inference to estimateand select the ‘best’ model and project the results to a future situation. We showthat while the inference approaches are powerful explanatory tools in validating theexisting theories, their restrictive theory-driven assumptions make them not tailormadefor predictions. We further explore how modeling considerations for inferenceand prediction are different.Different papers of this thesis present various aspects of the prediction problemand suggest approaches and solutions to each of them.In paper 1, the problem of aggregation over alternatives, and its effects on bothestimation and prediction, is discussed. The focus of paper 2 is the model selectionfor the purpose of improving the predictive power of discrete choice models. Inpaper 3, the problem of consistency when using disaggregate logit models for anaggregate prediction question is discussed, and a model combination is proposedas tool. In paper 4, an updated version of the Swedish car fleet model is appliedto assess a Bonus-Malus policy package. Finally, in the last paper, we present thereal world applications of the Swedish car fleet model where the sensitivity of logitmodels to the specification of choice set affects prediction accuracy.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2016. p. xv, 27
Series
TRITA-TSC-PHD ; 16:002
National Category
Social Sciences
Research subject
Transport Science
Identifiers
urn:nbn:se:kth:diva-180347 (URN)978-91-87353-82-6 (ISBN)
Public defence
2016-02-03, Kollegiesalen, Brinellvägen 8, KTH, Stockholm, 09:00 (English)
Opponent
Supervisors
Note

QC 20160115

Available from: 2016-01-15 Created: 2016-01-11 Last updated: 2022-06-23Bibliographically approved

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Habibi, ShivaKarlström, Anders

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