Dynamic Discrete Choice Model for Multiple Social Interactions

A dynamic discrete choice model for multiple social interactions was developed on the basis of retrospective panel data in the context of household vehicle-type choice. “Social interactions” refer to the influence of reference groups on household choice behavior. However, most studies in transportation have considered a household as a decision maker independent from the society to which it belongs. Social interactions have therefore not been well represented, especially if there were two or more types of reference groups, which may further vary over time. The model was built within the dynamic generalized extreme value framework, which included a set of dynamic elements, such as initial conditions, state dependence, and future expectation. This study defined three types of social interactions: diffusion rates of a vehicle type at the national level and at the neighborhood level and diffusion rate of households with the same income level. A survey was conducted in local Japanese cities in 2006. The survey focused on household vehicle ownership behavior over the 10 years from 1997 to 2006. Model estimation results confirmed that social interactions from reference groups of neighborhoods and households with the same income level were especially influential in decisions about household vehicle-type choice. On the contrary, social interaction from the whole society did not significantly influence the household choice. It was further found that effects of dynamic elements on the household choice were statistically significant.