Abstract
As in other panel data analyses, the presence of unobserved heterogeneity is a critical issue in the estimation of infrastructure performance models. In the literature, this issue has been addressed by formulating variable intercept, fixed or random effects models under the assumptions that (1) heterogeneity stems from facility/individual-level effects, and that (2) the coefficients are constant and homogeneous across the population. In contrast, we present mixture regression as a performance modeling framework. The approach relies on the assumption that the underlying population is comprised of a finite set of classes/segments in unknown proportions. The segmentation basis is latent meaning that the criteria to establish the number and type of segments are related to unobserved heterogeneity manifested in facility performance/deterioration. The segments are characterized by a set of commonly specified regression equations, which allows for the identification and estimation of coefficients, i.e., group-level effects, that differ in terms of their level-of-significance, magnitude or sign. We also derive an instance of the Expectation-Maximization Algorithm to estimate the associated parameters, and to assign facilities to the population segments. To illustrate the framework, we analyze the performance of a panel of 131 pavements from the AASHO Road Test. The results suggest both observed and unobserved sources of heterogeneity in the panel. The heterogeneity is captured by differential group-level effects, which we estimate and interpret. We also discuss how these effects can be exploited in the development of resource allocation strategies. We also compare the mixture regression model to established benchmarks.
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This research was partially supported by a Dissertation Year Fellowship awarded by The Northwestern University Transportation Center to the second author.
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Medury, A., Zhang, W. & Durango-Cohen, P.L. Identification and estimation of latent group-level-effects in infrastructure performance modeling. EURO J Transp Logist 4, 31–55 (2015). https://doi.org/10.1007/s13676-014-0057-1
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DOI: https://doi.org/10.1007/s13676-014-0057-1