[Limdep Nlogit List] start=logit with NL

Kandice L. Kleiber kleiberk at onid.orst.edu
Fri Jul 10 04:26:31 EST 2009

Hi -

I have a few questions regarding the *black box* in NLOGIT.  The  
nested logit model I have been running looks like this:
tree = cs(corn,soy), wh(wheat), ot(other), and the data does NOT very  
across alternatives - only across observations.

Because my nested model is a partially degenerate model, I'm using the  
RU1/RU2 commands to normalize.  When I use RU1, I add the restriction  
IVset:(wh,ot)=1.0.  However, when I run the 2 models, they "run"  
differently.  RU1 begins by running a MNL to get starting values,  
while RU2 does not, unless I call start=logit (at least not  
explicitly).  Even when I use the start=logit command on RU2, the  
value of my log likelihood function differs between RU1 and RU2 - from  
what I understand, this value should be the same (given the  
restriction with RU1).

Should I always include the start=logit command?  If not, when should I?
When the command RU2 is used, is the IV parameter NLOGIT reports = (1/ 
μ)?  Or does it report μ?

tree = cs(corn,soy),wh(wheat),ot(other);
lhs = lev;
ru2;  /*or ru1 with restriction ivset:(wh,ot)=1.0*/
U(corn) = c_c+c_price*price+ ... /
U(cs) = cs_cs+cs_soil*soil+.../

Any help is appreciated!  Thank you!

Kandice L. Kleiber
Graduate Teaching Assistant
Department of Economics
Oregon State University
e: kleiberk at onid.orst.edu
w: 541.737.6628

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