This article develops a new latent class (LC) model with a generalised nested logit (GNL) formulation to enhance the methodology of market segmentation analysis. The standard generalised nested logit (or the cross-nested logit model) is a special case of the latent class generalised nested logit model (LCGNL) that accounts for heterogeneity in individuals’ preferences by a number of segments and simultaneously identifies segment sizes and individual profiles. In addition, the LCGNL model allows flexible substitution patterns among alternatives. This extends the standard LC model with the multinomial logit formulation, such that the independence from irrelevant alternatives property does not hold within segments. The proposed model was used to identify potential segments of travellers’ preferences towards air and bus carriers. The estimation results of the LCGNL models indicate that degrees of competition vary across carriers and that differential sensitivity in preference parameters exists between segments. The LCGNL model outperforms the other models; therefore, it is a better approach for analysing carrier choice behaviour.


    Access

    Check access

    Check availability in my library

    Order at Subito €


    Export, share and cite



    Title :

    A latent class generalised nested logit model and its application to modelling carrier choice with market segmentation


    Contributors:
    Wen, Chieh-Hua (author) / Huang, Wan-Wen (author) / Fu, Chiang (author) / Chou, Pei-Yu (author)

    Published in:

    Publication date :

    2013-09-01




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English





    A nested logit model of parking location choice

    Hunt, J.D. | Online Contents | 1993


    Behavioral Foundations of Nested Stochastic Choice and Nested Logit

    Kovach, Matthew / Tserenjigmid, Gerelt | ArXiv | 2021

    Free access


    A latent class model for discrete choice analysis: contrasts with mixed logit

    Greene, William H. / Hensher, David A. | Elsevier | 2002