Analytical Prediction of Transition Probabilities in the Conditional Logit Model ∗

@inproceedings{Bonin2004AnalyticalPO,
  title={Analytical Prediction of Transition Probabilities in the Conditional Logit Model ∗},
  author={Holger Bonin and Bonn Hilmar Schneider},
  year={2004}
}
The paper derives analytical transitions probabilities following an exogenous shock to the deterministic component in the conditional logit model. The solution draws on the post-estimation distribution of the model’s stochastic component, identified on the basis of a direct utility maximization interpretation of agents’ revealed choice. Computational experiments confirm that analytical prediction of transitions probabilities might perform substantially better than the established calibration… CONTINUE READING