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Specification Tests for Nested Logit Models

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  • J L Horowitz

    (Departments of Geography and Economics, The University of Iowa, Iowa City, IA 52242, USA)

Abstract

The nested or sequential logit model is the only computationally tractable randomutility model that permits correlation among the random components of the utility functions of different alternatives. In this paper, two specification tests are described for nested logit models. One is a test of a maintained model against a nonnested alternative. This test can be used, among other purposes, to discriminate among models with different tree structures. It can be implemented by hand using the results of sequential estimation of the models under consideration. The other test consists of comparing the sequentially estimated parameter values with values produced by an asymptotically efficient estimation technique. This test does not require estimating an alternative to the maintained model.

Suggested Citation

  • J L Horowitz, 1987. "Specification Tests for Nested Logit Models," Environment and Planning A, , vol. 19(3), pages 395-402, March.
    • Handle: RePEc:sae:envira:v:19:y:1987:i:3:p:395-402
    DOI: 10.1068/a190395
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    References listed on IDEAS

    as
    1. Kenneth Train, 1980. "A Structured Logit Model of Auto Ownership and Mode Choice," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(2), pages 357-370.
    2. Joel L. Horowitz, 1983. "Statistical Comparison of Non-Nested Probabilistic Discrete Choice Models," Transportation Science, INFORMS, vol. 17(3), pages 319-350, August.
    3. Berkovec, James & Rust, John, 1985. "A nested logit model of automobile holdings for one vehicle households," Transportation Research Part B: Methodological, Elsevier, vol. 19(4), pages 275-285, August.
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    1. Jaume Puig & Marc Sáez & Esther Martínez Garcia, 1998. "Health care provider choice in the case of patient-initiated contacts. An extended version of discrete choice of model demand," Working Papers, Research Center on Health and Economics 308, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Kingsley E. Haynes & Stewart Fotheringham, 1990. "The Impact of Space on the Application Of Discrete Choice Models," The Review of Regional Studies, Southern Regional Science Association, vol. 20(2), pages 39-49, Spring.
    3. Eymann, Angelika & Ronning, Gerd, 1996. "Microeconometric models of tourists' destination choise," Tübinger Diskussionsbeiträge 84, University of Tübingen, School of Business and Economics.
    4. Kaoru, Yoshiaki, 1995. "Measuring marine recreation benefits of water quality improvements by the nested random utility model," Resource and Energy Economics, Elsevier, vol. 17(2), pages 119-136, August.
    5. Kathleen W. Johnson, 1999. "Credit constraints, consumer leasing and the automobile replacement decision," Finance and Economics Discussion Series 1999-68, Board of Governors of the Federal Reserve System (U.S.).
    6. Eymann, Angelika & Ronning, Gerd, 1997. "Microeconometric models of tourists' destination choice," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 735-761, November.

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