{"about":{"site":"https://codewithpapers.app","non_affiliation":"Code with Papers and Syntology are not affiliated with, endorsed by, or sponsored by Papers with Code, Meta, or the pwc-archive mirror.","licence":"CC BY-SA 4.0","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","attribution":"https://codewithpapers.app/attribution","modified":"archive material modified by Syntology; see the attribution page"},"url":"/paper/an-economically-consistent-discrete-choice","title":"An economically-consistent discrete choice model with flexible utility specification based on artificial neural networks","arxiv_id":"2404.13198","date":"2024-04-19","proceeding":null,"authors":["Jose Ignacio Hernandez","Niek Mouter","Sander van Cranenburgh"],"abstract":"Random utility maximisation (RUM) models are one of the cornerstones of discrete choice modelling. However, specifying the utility function of RUM models is not straightforward and has a considerable impact on the resulting interpretable outcomes and welfare measures. In this paper, we propose a new discrete choice model based on artificial neural networks (ANNs) named \"Alternative-Specific and Shared weights Neural Network (ASS-NN)\", which provides a further balance between flexible utility approximation from the data and consistency with two assumptions: RUM theory and fungibility of money (i.e., \"one euro is one euro\"). Therefore, the ASS-NN can derive economically-consistent outcomes, such as marginal utilities or willingness to pay, without explicitly specifying the utility functional form. Using a Monte Carlo experiment and empirical data from the Swissmetro dataset, we show that ASS-NN outperforms (in terms of goodness of fit) conventional multinomial logit (MNL) models under different utility specifications. Furthermore, we show how the ASS-NN is used to derive marginal utilities and willingness to pay measures.","url_abs":"https://arxiv.org/abs/2404.13198v1","url_pdf":"https://arxiv.org/pdf/2404.13198v1.pdf","source":{"archive":"pwc-archive (Hugging Face), CC BY-SA 4.0","snapshot":"2025-07-28","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","row_kind":"abstracts"},"code_links":[{"paper_slug":"an-economically-consistent-discrete-choice","repo_url":"https://github.com/ighdez/ass_nn_paper","is_official":1,"mentioned_in_paper":1,"mentioned_in_github":0,"framework":"tf","reach":null}],"tasks":[],"methods":[],"datasets_introduced":[],"methods_introduced":[],"results":[],"syntology":{"atlas_url":null,"mcp":null,"developers":"https://syntology.ai/developers"},"arxiv_metadata":null,"syntology_extracted_results":null}