In this article we show how to implement merger simulation in Stata after estimating an aggregate nested logit demand system with a linear regression model. We also show how to implement merger simulation when the demand parameters are not estimated, but instead calibrated to be consistent with outside information on average price elasticities and pro…t margins.

We discuss some empirical and methodological issues arising when the Cox test statistic for non-nested models is used to test the probit vs. logit specifications. As an example, we consider the models in Bardasi and Monfardini (1997) for the occupational choice by Italian workers among the private, public and self-employed options. Different versions of the test are compared. The bootstrap tech...

The Independence of Irrelevant Alternatives (IIA) property of the multinomial logit (MNL) model imposes the restriction of zero covariance between the utilities of pairs of alternatives. This restriction is inappropriate for many choice situations; those in which some pairs or sets of alternatives share the same unobserved attributes. The nested logit (NL) model relaxes the zero covariance rest...

An exact formula for the expected compensating variation is derived for logit and nested-logit models with income effects. Intuition, examples, and an application are provided. The appendix contains a formal proof. The formula is applied to estimate the E[cv]s salmon anglers in Maine would associate with changes in catch rates at Maine and Canadian Rivers.

We show that the distributions of random coefficients in various discrete choice models are nonparametrically identified. Our identification results apply to static discrete choice models including binary logit, multinomial logit, nested logit, and probit models as well as to dynamic programming discrete choice models. In these models the only key condition we need to verify for identification ...

logit models are one of the most important discrete choice models and they play an important role in describing decision makers’ choices among alternatives. in this paper the multi-nominal logit models has been used in mode choice modeling of isfahan. despite the availability of different mathematical computer programs there are not so many programs available for estimating discrete choice mode...

The workhorse brand choice models in marketing are the multinomial logit (MNL) and nested multinomial logit (NMNL). These models place strong restrictions on how brand share and purchase incidence price elasticities are related. They predict market shares well, but not inter-purchase spell lengths. In this paper, we propose a new model of brand choice, the “price consideration” (PC) model, that...