On allowing a general form for unobserved heterogeneity in the multiple discrete-continuous probit model: Formulation and application to tourism travel

This paper proposes a new econometric formulation and an associated estimation method for a finite discrete mixture of normals (FDMN) version of the multiple discrete–continuous probit (MDCP) model. To our knowledge, this is the first such formulation and application of an MDCP model in the econometric literature. Using the New Zealand Domestic Travel Survey data set, the model is applied to analyze individual-level decisions regarding recreational destination locations and the number of trips to each destination. The results provide insights into the demographic and other factors that influence individuals’ preferences for different destinations, and show that the FDMN MDCP model is able to identify different segments of the sample, each one of them with different effects of the exogenous variables on destination choice.