(4)
To compute an aggregate-level elasticity of an ordinal exogenous variable (such as the number of children in the household), we increase the value of the variable by 1 unit for each observation and compute new mode shares. We then compute the aggregate-level elasticity as follows:
(5)
where and are the shares of alternative i before and after the ordinal variable is increased by 1 unit respectively.
Finally, to compute the aggregate-level elasticity of a dummy exogenous variable (such as ethnic status, and presence of a handicap), we divide the entire sample into two subsamples based on the value of the dummy variable. We then compute shifts in mode shares in each subsample due to a zero to one and one to zero change in the dummy variable respectively. The ratio of the difference of the shifts between the two subsamples to the aggregate mode shares in the entire sample yields the aggregate-level elasticity of the dummy variable.
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