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Flexibility without foresight: the predictive limitations of mixture models

Stephane Hess, Sander van Cranenburgh

arXiv 10 Oct 2025 · Econometrics

arXiv:2510.09185 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Models allowing for random heterogeneity, such as mixed logit and latent class, are generally observed to obtain superior model fit and yield detailed insights into unobserved preference heterogeneity. Using theoretical arguments and two case studies on revealed and stated choice data, this paper highlights that these advantages do not translate into any benefits in forecasting, whether looking at prediction performance or the recovery of market shares. The only exception arises when using conditional distributions in making predictions for the same individuals included in the estimation sample, which obviously precludes any out-of-sample forecasting.

Citation extraction

15
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appendix boundary found by appendix_command · 69% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Revelt, D. and Train, K (1998) Mixed Logit with repeated choices: households' choices of appliance efficiency level0.64422100%
2Train, K (2009) Discrete Choice Methods with Simulation0.64422100%
3Fox, J. B (2015) Temporal Transferability of Mode-Destination Choice Models0.64422100%
4Hess, S., Lancsar, E., Mariel, P., Meyerhoff, J., Song, F., van den… (2022) The path towards herd immunity: Predicting covid-19 vaccination uptake through results from a stated choice study across six con… self0.51121100%
5Hess, S., Train, K., and Polak, J. W (2006) On the use of a Modified Latin Hypercube Sampling (MLHS) method in the estimation of a Mixed Logit model for vehicle choice self0.40511100%
6Daly, A (2024) Forecasting choice0.40511100%
7Danaf, M., Becker, F., Song, X., Atasoy, B., and Ben-Akiva, M (2019) Online discrete choice models: Applications in personalized recommendations0.40511100%
8Fox, J., Daly, A., Hess, S., and Miller, E (2014) Temporal transferability of models of mode-destination choice for the greater toronto and hamilton area self0.40511100%
9Hess, S. and Train, K. E (2011) Recovery of inter- and intra-personal heterogeneity using mixed logit models self0.40511100%
10Calastri, C., dit Sourd, R. C., and Hess, S (2020) We want it all: experiences from a survey seeking to capture social network structures, lifetime events and short-term travel an…0.40511100%

Showing the top 10 of 15 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Combine and conquer: model averaging for out-of-distribution forecasting0.40511