Nonlinear multivariate time–space threshold vector error correction model for short term traffic state prediction

We propose Time–Space Threshold Vector Error Correction (TS-TVEC) model for short term (hourly) traffic state prediction. The theory and method of cointegration with error correction mechanism is employed in the general design of the new statistical model TS-TVEC. An inherent connection between mathematical form of error correction model and traffic flow theory is revealed through the transformation of the well-known Fundamental Traffic Diagrams. A threshold regime switching framework is implemented to overcome any unknown structural changes in traffic time series. Spatial cross correlated information is incorporated with a piecewise linear vector error correction model. A Neural Network model is also constructed in parallel to comparatively test the effectiveness and robustness of the new statistical model. Our empirical study shows that the TS-TVEC model is an effective tool that is capable of modeling the complexity of stochastic traffic flow processes and potentially applicable to real time traffic state prediction.