[Limdep Nlogit List] Reference alternative of individual characteristics in the case of variable sized choice sets

William Greene wgreene at stern.nyu.edu
Thu Dec 20 02:19:04 AEDT 2018

Lixian.  There is no "reference" alternative.  The probability is computed
exp(V_j) / Sum[j=1,...,J] exp(V_j).
All alternatives have the same precedence.  When you have only a subset of
the alternatives
in the choice set, the probabilities are computed conditionally on the
specific choices in that
choice set.

On Wed, Dec 19, 2018 at 9:59 AM Lixian Qian <Lixian.Qian at xjtlu.edu.cn>

> Dear all,
> I am running a discrete choice model with variable sized choice sets for
> two groups of people.
> Say there are three alternatives, bus, train and car, where car is only
> available for some people. Each alternative has two attributes of cost and
> time, and each people has individual characteristic of income.
> Then, I have following utility functions:
> U(bus) = βcost costi,bus + βtime timei,bus + αbus + γbus incomei
> U(train) = βcost costi,train + βtime timei,train + αtrain + γtrain incomei
> U(car) =βcost costi,car + βtime timei,car
> My puzzle is that for the people without car in their choice set, what is
> the reference alternative when estimating and interpreting the coefficients
> of income.
> Appreciate your time to answer my question.
> Thank you.
> Best,
> Lixian
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William Greene
Department of Economics
Stern School of Business, New York University
44 West 4 St., 7-90
New York, NY, 10012
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Email: wgreene at stern.nyu.edu
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