A competing hazard model of household vehicle transaction behavior with discrete time intervals and unobserved heterogeneity

Abstract

The analysis of household vehicle ownership behavior is considered as one of the most important elements of household travel behavior studies. Several different modeling frameworks have been employed to develop vehicle ownership models. Among these models, applications of hazard based duration models have drawn particular attention in recent years. Hazard models of vehicle transactions often have overlooked the effects of unobserved heterogeneity in the model. This study attempts to address this limitation by formulating and estimating a discrete competing hazard model of vehicle transaction with multiple outcomes that also accounts for unobserved heterogeneity. Three transaction decisions of purchasing, trading, or disposing of a vehicle are considered and competing duration models, with and without unobserved heterogeneity are estimated and compared. The modeling framework is flexible enough to consider transaction times that are not continuous and the failures that occur within discrete time intervals.

Keywords:

• Discrete Hazard Formulation
• Vehicle Transaction
• Unobserved Heterogeneity
• Competing Duration Model