On the Equivalence of Location Choice Models: Conditional Logit, Nested Logit and Poisson

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Serval ID
serval:BIB_005053025C86
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
On the Equivalence of Location Choice Models: Conditional Logit, Nested Logit and Poisson
Journal
Journal of Urban Economics
Author(s)
Schmidheiny K., Brülhart M.
ISSN
0094-1190
Publication state
Published
Issued date
03/2011
Peer-reviewed
Oui
Volume
69
Number
2
Pages
214-222
Language
english
Abstract
It is well understood that the two most popular empirical models of location choice – conditional logit and Poisson – return identical coefficient estimates when the regressors are not individual specific. We show that these two models differ starkly in terms of their implied predictions. The conditional logit model represents a zero-sum world, in which one region’s gain is the other regions’ loss. In contrast, the Poisson model implies a positive-sum economy, in which one region’s gain is no other region’s loss. We also show that all intermediate cases can be represented as a nested logit model with a single outside option. The nested logit turns out to be a linear combination of the conditional logit and Poisson models. Conditional logit and Poisson elasticities mark the polar cases and can therefore serve as boundary values in applied research.
Keywords
Firm location, Residential choice, Conditional logit, Nested logit, Poisson count model
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Create date
07/10/2010 9:36
Last modification date
20/08/2019 12:22
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