Multinomial Logit Choice Model in R with mnlogit()

Question

I have question regarding the mnlogit package in R which I'll ask on StackOverflow as it's related to a specific language and library, however I won't be offended if someone decides to move it to Cross Validated (it was a hard choice of which StackExchange site was most appropriate).

I'm just trying to make sure I understand how this works, since the documentation isn't too detailed, I see some confusing/conflicting blog entries on this package, and because it's been a couple of years since I've dealt with choice models.

The example usage of mnlogit is basically as follows:

> require(mnlogit)
> data(Fish)
> head(Fish)
           mode   income     alt   price  catch chid
1.beach   FALSE 7083.332   beach 157.930 0.0678    1
1.boat    FALSE 7083.332    boat 157.930 0.2601    1
1.charter  TRUE 7083.332 charter 182.930 0.5391    1
1.pier    FALSE 7083.332    pier 157.930 0.0503    1
2.beach   FALSE 1250.000   beach  15.114 0.1049    2
2.boat    FALSE 1250.000    boat  10.534 0.1574    2
> fm <- formula(mode ~ price | income | catch)
> result <- mnlogit(fm, Fish, "alt", ncores = 2) 

What I find confusing is mode and alt. I would've thought that the dependent variable would be the multinomial choice, which appears to be alt (beach, boat, charter, or pier).

Instead it's this logical variable, mode. What's mode?

To try to clarify my understand I read an R-Bloggers article on the topic. It actually made things more confusing by repeating the Fish example, but with a preamble describing the dataset in this way:

A data frame containing :

mode - The choice set: beach, pier, boat, and charter
price - price for a mode for an individual
catch - fish catch rate for a mode for an individual
income - monthly income of the individual decision-maker
chid - decision maker ID

It describes mode as if it were alt then does not mention alt. Can someone explain this to me?

If mode really did take on the discrete choice values as described in the R-Bloggers article, then the model formula(mode ~ price | income | catch) would make sense to me... but mode is a logical variable, so I am thoroughly confused.

Answer 1

Oh, okay. I think I see now -- mode indicates which of the four possible choices was chosen, given the characteristics of each choice set. That makes sense.