A method of integrating correlation structures for a generalized recursive route choice model

- A generalization of recursive models for the choice of path in a network.
- Based on a dynamic discrete choice framework, no choice set generation needed.
- The choice model at each stage can be any member of the network MEV model (e.g. the nested, cross-nested logit).
- A method of integrating correlation structures to simplify the estimation.
- Estimation and cross-validation results using real data.

We propose a way to estimate a generalized recursive route choice model. The model generalizes other existing recursive models in the literature, i.e., (Fosgerau et al., 2013b; Mai et al., 2015c), while being more flexible since it allows the choice at each stage to be any member of the network multivariate extreme value (network MEV) model (Daly and Bierlaire, 2006). The estimation of the generalized model requires defining a contraction mapping and performing contraction iterations to solve the Bellman's equation. Given the fact that the contraction mapping is defined based on the choice probability generating functions (CPGF) (Fosgerau et al., 2013b) generated by the network MEV models, and these CPGFs are complicated, the generalized model becomes difficult to estimate. We deal with this challenge by proposing a novel method where the network of correlation structures and the structure parameters given by the network MEV models are integrated into the transport network. The approach allows to simplify the contraction mapping and to make the estimation practical on real data.We apply the new method on real data by proposing a recursive cross-nested logit (RCNL) model, a member of the generalized model, where the choice model at each stage is a cross-nested logit. We report estimation results and a prediction study based on a real network. The results show that the RCNL model performs significantly better than the other recursive models in fit and prediction.