EconPapers    
Economics at your fingertips  
 

On the equivalence of location choice models: Conditional logit, nested logit and Poisson

Kurt Schmidheiny () and Marius Brülhart

Journal of Urban Economics, 2011, vol. 69, issue 2, 214-222

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 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (53) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0094-1190(10)00068-9
Full text for ScienceDirect subscribers only

Related works:
Working Paper: On the Equivalence of Location Choice Models: Conditional Logit, Nested Logit and Poisson (2009) Downloads
Working Paper: On the Equivalence of Location Choice Models: Conditional Logit, Nested Logit and Poisson (2009) Downloads
Working Paper: On the equivalence of location choice models: conditional logit, nested logit and poisson (2009) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:69:y:2011:i:2:p:214-222

Access Statistics for this article

Journal of Urban Economics is currently edited by S.S. Rosenthal and W.C. Strange

More articles in Journal of Urban Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-03
Handle: RePEc:eee:juecon:v:69:y:2011:i:2:p:214-222