[Limdep Nlogit List] Censored normal distribution in Mixed Logit and its correlation

KH Lim khlim2 at gmail.com
Sat Oct 30 05:56:38 AEDT 2021


Hi all,

Suppose I estimate a mixed logit model with two variables. Variable A is
distributed normal (n), and B is distributed censored right normal (m).  My
questions are:

1. Is the reported coefficient of B the mean or the mean of B's underlying
normal distribution? For example, if the reported coefficient is 0.5, and
standard deviation is 2, is the mean of B indeed 0.5? Or is it somewhere
more to the right?

2. In the NLOGIT 5 manual, page N-530:
"If you will be mixing distributions, the specification of correlated
parameters, while allowable, produces ambiguous results. The nature of the
correlation is difficult to define. However, the program will have no
unusual difficulty estimating a model in which correlated parameters have
different distributions. "

Is the correlation matrix produced by the estimator subject to such
complications in the case of censored normal distribution? If so, can a
positive correlation still mean "a person who likes A tends to like B"?

Thank you,
Kar Lim


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