The Generalized Nested Logit Model

Abstract

The generalized nested logit model is a new member of the generalized extreme value family of models. The GNL provides a higher degree of flexibility in the estimation of substitution or cross-elasticity between pairs of alternatives than previously developed generalized extreme value models. The generalized nested logit model includes the paired combinatorial logit and cross-nested logit models as special cases. It also includes the product differentiation model, which represents the elasticity structure associated with multi-dimensional choices, and the ordered generalized extreme value model, which represents the elasticity structure associated with ordered alternatives, as special cases. The generalized nested logit model includes the two-level nested logit model as a special case and can approximate closely multi-level nested logit models. The generalized nested logit model accommodates differential cross-elasticity among pairs of alternatives through the fractional allocation of each alternative to a set of nests, each of which has a distinct logsum or dissimilarity parameter. An empirical example of intercity mode choice confirms the statistical superiority of the generalized nested logit model to the paired combinatorial logit, cross-nested logit and nested logit models and indicates important differences in cross-elasticity relationships across pairs of alternatives.

5 Figures and Tables

Statistics

0510'03'05'07'09'11'13'15'17
Citations per Year

72 Citations

Semantic Scholar estimates that this publication has 72 citations based on the available data.

See our FAQ for additional information.

Cite this paper

@inproceedings{Wen2001TheGN, title={The Generalized Nested Logit Model}, author={Chieh-Hua Wen and Frank S. Koppelman}, year={2001} }