Abstract
Amemiya and Shimono (1989) estimated the parameters of various nested logit models to explain the choice of four alternatives facing those who have retired from their regular employment at age 55. The four alternatives are 1 to retire (to be denoted by the symbol “R”), 2 to be self-employed (“S”), 3 to be employed full-time (“F”), and 4 to be employed part-time (“P”). They estimated four types of nested logit models differing by the way four alternatives are nested. Here we mention only what they called Type I, which is characterized by the following joint distribution of the stochastic terms of the utilities associated with the four alternatives:
for 0 < σ, ρ ≤ 1. Here σ and ρ are called the association parameters, and the bounds on them are required to make F a proper distribution function.
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References
Amemiya, T. and Shimono, K. (1989). An Application of Nested Logit Models to the Labor Supply of the Elderly. Economic Studies Quarterly, March 1989.
Börsch-Supan, A. (1990). Econometric Analysis of Discrete Choice. Springer-Verlag.
Börsch-Supan, A. (1987). On the Compatibility of Nested Logit Models with Utility Maximization. Springer-Verlag. Journal of Econometrics, 43, pp. 373–388, North-Holland.
McFadden, D. (1989). A Method of Simulated Moments for Estimation of Discrete Response Models Without Numerical Integration. Econometrica, Vol. 57, No. 5, pp. 995–1026.
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© 2002 Springer Science+Business Media New York
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Amemiya, T., Kim, D. (2002). A Generalization of the Nested Logit Model. In: Klein, I., Mittnik, S. (eds) Contributions to Modern Econometrics. Dynamic Modeling and Econometrics in Economics and Finance, vol 4. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3602-1_1
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DOI: https://doi.org/10.1007/978-1-4757-3602-1_1
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