[Limdep Nlogit List] Welfare Measures in the Nested Logit Model with Covariance heterogeneity
Mikołaj Czajkowski
miq at wne.uw.edu.pl
Fri Dec 19 23:53:01 EST 2008
Dear All,
I am using the Nested Logit Model with Covariance Heterogeneity and I
would like to estimate welfare measures.
Unfortunately the only paper explicitly deriving welfare measures for
the nested logit model which I was able to identify is:
- Kling CL, Thomson CJ (1996) 'The Implications of Model Specification
for Welfare Estimation in Nested Logit Models'. American Journal of
Agricultural Economics 78(1): 103-114
I have summarized the approach in the attachment, since the formula is
too complicated to write it inline.
My questions are as follows:
1. Could anyone verify if the formula is ok?
I would also appreciate some suggestions on papers / books where I could
see how to derive welfare measures for the nested logit model. I
understand that the utility of each alternative is weighted by the
probability of selecting it, but I can't seem to be able to derive it
myself.
2. In case of the nested model with covariance heterogeneity - if I am
interested in the mean CV, should I use individual-specific or sample
mean values of attributes explaining inclusive value parameters?
I have specified the CV formula using the WALD command, however I am not
sure whether variables or their means should be used as covariates of
inclusive value parameters. Both approaches seem to give different results.
I would appreciate all the comments you might have. Thank you very much
in advance.
Best regards,
--
Mikołaj Czajkowski
Warsaw Ecological Economics Center
University of Warsaw
http://www.woee.pl/
More information about the Limdep
mailing list