[Limdep Nlogit List] Negative standard deviation of error component

[William Greene]

Lixian. In a 4 choice model, you can only have 3 independent error
components.
You should drop one of them.
/B. Greene

On Tue, May 7, 2019 at 4:06 AM Lixian Qian <Lixian.Qian at xjtlu.edu.cn> wrote:

> Hello,
>
> We are running an error component logit model with four alternatives.
>
> SAMPLE ; All $
> ECLOGIT; Lhs = Choice  ; Choices=CB,BL,CL,CS
>     ;Model:
>     U(CB) =Price*Capital + TripCost*TripCost+subsidy*subsidy + licen*licen
> + FCSERVICE*CSERVICE + FCTIME*TSERVICE + home*home + renew*recost/
>     U(BL) =Price*Capital + TripCost*TripCost+subsidy*subsidy + licen*licen
> + BSERVICE*CSERVICE + BLTIME*TSERVICE + home*home + BL/
>     U(CL) =RentCost*Cost + licen*licen+FCSERVICE*CSERVICE +
> FCTIME*TSERVICE + home*home + CL/
>     U(CS) =ShareCost*TripCost + licen*licen + CSERVICE*CSERVICE +
> checka*checka+CS
>     ; CheckData
>     ; PTS=500
>     ; ECM=(CB),(BL),(CL),(CS)
>     ; PDS=4
>     ; maxit=500
>     ; Output = IC$
>
> To our surprise, the results show that one error component has negative
> (and significant) standard deviation.
>
> Can anyone please advise on the issue? Thank you.
>
>
> Best,
> Lixian
>
>
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-- 
William Greene
Department of Economics
Stern School of Business, New York University
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