[Limdep Nlogit List] Should mixed logit (ML) be able to replicate base choice shares and should MLs be used for forecasts?

Richard Turner richard.turner at imarketresearch.com
Thu Mar 9 02:48:30 AEDT 2017


I have a couple of questions. I would greatly appreciate some commentary on
them. Thanks in advance for any answers.

   1. Should mixed logit with alternative specific constants and estimated
   individual parameters be able to replicate the "base" choice shares (i.e.
   choice shares in the data) within the data? Alternative specific constants
   have this affect in multinomial logit choice models and I was wondering if
   the same applied to mixed logit. *In a mixed logit model that I
   estimated, I calculated shares using the fixed coefficients and the
   individual level parameters, but the shares were a bit off from the actual
   shares in the data*. I'm not sure if this would make a difference but,
   about 70% of my variables in the multinomial logit model to create my
   starting values were significant, but none of the parameters in my ML were.
   The ML parameters did not seem strange in magnitude though.
   2. Should ML with estimated individual parameters be used for forecasts?
   I've read that they should not, but I am not sure why. Shouldn't the
   individual parameters, if accurate, create accurate forecasts for the
   population? If not, why should one trust that the distribution of
   parameters was estimated correctly in the first place.



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