Two Level Nested and Sequential Logit
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arXiv
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866910899506249728 |
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| author | Luparello, Davide |
| author_facet | Luparello, Davide |
| contents | This technical note provides comprehensive derivations of fundamental equations in two-level nested and sequential logit models for analyzing hierarchical choice structures. We present derivations of the Berry (1994) inversion formula, nested inclusive values computation, and multi-level market share equations, complementing existing literature. While conceptually distinct, nested and sequential logit models share mathematical similarities and, under specific distributional assumptions, yield identical inversion formulas-offering valuable analytical insights. These notes serve as a practical reference for researchers implementing multi-level discrete choice models in empirical applications, particularly in industrial organization and demand estimation contexts, and complement Mansley et al. (2019). |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2503_21808 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Two Level Nested and Sequential Logit Luparello, Davide Econometrics General Economics Economics This technical note provides comprehensive derivations of fundamental equations in two-level nested and sequential logit models for analyzing hierarchical choice structures. We present derivations of the Berry (1994) inversion formula, nested inclusive values computation, and multi-level market share equations, complementing existing literature. While conceptually distinct, nested and sequential logit models share mathematical similarities and, under specific distributional assumptions, yield identical inversion formulas-offering valuable analytical insights. These notes serve as a practical reference for researchers implementing multi-level discrete choice models in empirical applications, particularly in industrial organization and demand estimation contexts, and complement Mansley et al. (2019). |
| title | Two Level Nested and Sequential Logit |
| topic | Econometrics General Economics Economics |
| url | https://arxiv.org/abs/2503.21808 |