Daniel Villarraga

Standard Discrete Choice Models (DCMs) assume that unobserved effects that influence decision-making are independently and identically distributed among individuals. When unobserved effects are spatially correlated, the independence assumption does not hold, leading to biased standard errors and potentially biased parameter estimates. This paper proposes an interpretable Hierarchical Nearest Neighbor Gaussian Process (HNNGP) model to account for spatially correlated unobservables in discrete choice analysis. Gaussian Processes (GPs) are often regarded as lacking interpretability due to their non-parametric nature. However, we demonstrate how to incorporate GPs directly into the latent utility specification to flexibly model spatially correlated unobserved effects without sacrificing structural economic interpretation. To empirically test our proposed HNNGP models, we analyze binary and multinomial mode choices for commuting to work in New York City. For the multinomial case, we formulate and estimate HNNGPs with and without independence from irrelevant alternatives (IIA). Building on the interpretability of our modeling strategy, we provide both point estimates and credible intervals for the value of travel time savings in NYC. Finally, we compare the results from all proposed specifications with those derived from a standard logit model and a probit model with spatially autocorrelated errors (SAE) to showcase how accounting for different sources of spatial correlation in discrete choice can significantly impact inference. We also show that the HNNGP models attain better out-of-sample prediction performance when compared to the logit and probit SAE models, especially in the multinomial case.

Citation: Villarraga, D. F., & Daziano, R. A. (2025). Hierarchical Nearest Neighbor Gaussian Process models for discrete choice: Mode choice in New York City. Transportation Research Part B: Methodological, 191, 103132.

We introduce a novel model architecture that incorporates network effects into discrete choice problems, achieving higher predictive performance than standard discrete choice models while offering greater interpretability than general-purpose flexible model classes. Econometric discrete choice models aid in studying individual decision-making, where agents select the option with the highest reward from a discrete set of alternatives. Intuitively, the utility an individual derives from a particular choice depends on their personal preferences and characteristics, the attributes of the alternative, and the value their peers assign to that alternative or their previous choices. However, most applications ignore peer influence, and models that do consider peer or network effects often lack the flexibility and predictive performance of recently developed approaches to discrete choice, such as deep learning. We propose a novel graph convolutional neural network architecture to model network effects in discrete choices, achieving higher predictive performance than standard discrete choice models while retaining the interpretability necessary for inference--a quality often lacking in general-purpose deep learning architectures. We evaluate our architecture using revealed commuting choice data, extended with travel times and trip costs for each travel mode for work-related trips in New York City, as well as 2016 U.S. election data aggregated by county, to test its performance on datasets with highly imbalanced classes. Given the interpretability of our models, we can estimate relevant economic metrics, such as the value of travel time savings in New York City. Finally, we compare the predictive performance and behavioral insights from our architecture to those derived from traditional discrete choice and general-purpose deep learning models.

Citation: Villarraga, D. F., & Daziano, R. A. (2025). Designing Graph Convolutional Neural Networks for Discrete Choice with Network Effects. arXiv preprint arXiv:2503.09786.

Discrete choice models (DCMs) are used to analyze individual decision-making in contexts such as transportation choices, political elections, and consumer preferences. DCMs play a central role in applied econometrics by enabling inference on key economic variables, such as marginal rates of substitution, rather than focusing solely on predicting choices on new unlabeled data. However, while traditional DCMs offer high interpretability and support for point and interval estimation of economic quantities, these models often underperform in predictive tasks compared to deep learning (DL) models. Despite their predictive advantages, DL models remain largely underutilized in discrete choice due to concerns about their lack of interpretability, unstable parameter estimates, and the absence of established methods for uncertainty quantification. Here, we introduce a deep learning model architecture specifically designed to integrate with approximate Bayesian inference methods, such as Stochastic Gradient Langevin Dynamics (SGLD). Our proposed model collapses to behaviorally informed hypotheses when data is limited, mitigating overfitting and instability in underspecified settings while retaining the flexibility to capture complex nonlinear relationships when sufficient data is available. We demonstrate our approach using SGLD through a Monte Carlo simulation study, evaluating both predictive metrics--such as out-of-sample balanced accuracy--and inferential metrics--such as empirical coverage for marginal rates of substitution interval estimates. Additionally, we present results from two empirical case studies: one using revealed mode choice data in NYC, and the other based on the widely used Swiss train choice stated preference data.

Citation: Villarraga, D. F., & Daziano, R. A. (2025). Bayesian Deep Learning for Discrete Choice. arXiv preprint arXiv:2505.18077.