Modelling Hierarchical Destination Choice

Abstract

The production-constrained gravity formulation is shown to be an especially inaccurate specification of reality whenever the selection of destinations by individuals results from a hierarchical choice process. Hierarchical decisionmaking violates the Independence from Irrelevant Alternatives property embedded in the theoretical derivation of the production-constrained gravity model from choice axioms. Various aspects of gravity model misspecification resulting from hierarchical destination choice are investigated and an empirical example is given in terms of US migrants. A discussion is presented of several destination choice models that are more accurately specified than the gravity formulation when destination choice is hierarchical. The recently derived competing destinations formulation is shown to be amongst the most useful in this respect. The discussion is framed in the context of discrete choice theory.