Dominance attributes for alternatives’ perception in choice set formation: An application to spatial choices

Abstract

Few practitioners interested in spatial choice would contest the importance of properly specifying the choice set in destination choice modelling applications to avoid model parameter bias. The number of elements in the universe of alternatives makes it hard to assume beforehand that the individual is able to evaluate each and every one of them and then make an educated decision. A portion of the universe of alternatives is considered instead. The traditional approaches consist of delineation based on a restricted list of deterministic criteria selected by the analyst. This opens the door to likely mis-specification of choice sets and, in turn, it can lead to an incorrect setting of the parameters of the utility function and incorrectly predicted choice probabilities. The objective of this paper is to provide a methodology which aims to bypass the question of excluding a priori any alternative from the choice set. The approach considered is that of assigning to each alternative a perception degree, which varies among alternatives, but which make them perceived simultaneously by the decision-maker. This methodology will be applied to model residential location choice in the canton of Zurich.