Applying None weight in calculations

Question

Dear colleagues,

Could you explain how do you calculate in SMRT share of preference for None option using None weight? I used the following approaches in Excel:
1. =exp(NoneWeight*NoneUtility)/SumOfExponents
2. =NoneWeight*exp(NoneUtility)/SumOfExponents

I got 100% sum of shares but in both cases I did not get the same numbers as in SMRT.


BR,
Alexey

Answer 1

The none weight in SMRT is applied as NoneWeight*exp(NoneUtility), which results in its non-normalized share.  This is done before the SumOfExponents is calculated, which is used to normalize the shares to their 0-100 form.

Comments

Dear Walter,

Many thanks for rapid response.
I will double check my calculations.

Kind regards,
Alexey

---

Hi,

I have had the same problem. When I build my simulator, I have one set of shares. However, when I attribute the weight 1 to the none option, I seem to have problems to match the shares. How to proceed in such cases?

Thanks a lot for your time.

Regards,

---

Are you building your own simulator, and comparing it to the SMRT simulator?  Are you using Share of Preference?  Can you provide more detail?

---

Hello, Walter,

Yes, I am building my own simulator. I am using Share of Preference in the calculations. I have seven price levels (1 to 7), and my "Market Price" is the level 4. When I add the NoneUtility to 4*PriceUtility, I match my market share. However, as I change the price levels, the shares do not match.

---

In our estimation software (assuming you used HB), if you coded your price attribute as Linear, then the level values (1-7) would be zero-centered in the design matrix (-3 to 3).  When doing simulation, the values should also be zero-centered before multiplying by the coefficient.