Scandinavian Working Papers in Economics

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2007/23: Modeling Heterogeneity in Trip-distributions with Partial Information

Kurt Jörnsten (), Gisle Kleppe (), Inge Thorsen () and Jan Ubøe ()
Additional contact information
Kurt Jörnsten: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Finance and Management Science, Helleveien 30, N-5045 Bergen, Norway
Gisle Kleppe: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Bjørnsonsgate 45, 5528 Haugesund, Norway
Inge Thorsen: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Bjørnsonsgate 45, 5528 Haugesund, Norway
Jan Ubøe: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Finance and Management Science, Helleveien 30, N-5045 Bergen, Norway

Abstract: In this paper we propose a modified gravity model that takes into account that a population generally consists of heterogeneous groups, and we suggest a new statistical test for heterogeneity. We apply our new model to two real world data sets, and it turns out that this new model fits the data surpricingly well. Not only is the effect of heterogeneity strongly significant, the model also provides far better fits than traditional trip-distribution models on these particular data sets.

Keywords: Commuting; heterogeneous preferences; cost efficiency; partial information

JEL-codes: R23; R41

25 pages, October 8, 2007

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