Identification and diagnosis of specification errors in the multinomial logit model

Multinomial logit models of travel demand are subject to a variety of specification errors that can severely affect the accuracy the models' forecasts. This paper describes some of the important sources of specification errors in logit models, presents numerical illustrations of the errors' effects on forecasts of travel behavior, and evaluates the ability of several informal and formal statistical procedures to identify and diagnose the errors. Among the tests considered, the most powerful are a test against a probit model and the McFadden, Tye and Train (1976) test based on the universal logit method. The least powerful tests are a test based on extrapolating the logit model and informal tests based on examination of the signs, t-statistics and ratios of the estimated parameters of the logit function.