Technical Note—Two Properties of the Nested Logit Model

Carlos F. Daganzo and Michael Kusnic
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Carlos F. Daganzo: Institute of Transportation Studies, University of California, Berkeley, California 94720
Michael Kusnic: Marketing and Product Planning Staff, General Motors Corporation, Detroit, Michigan 48202

Transportation Science, 1993, vol. 27, issue 4, 395-400

Abstract: This paper presents simple formulae for the utility covariances of the nested logit (NL) model, and based on these defines a “scaled tree” that can be used as an aid for the interpretation of estimation results. The paper also shows that the full information log-likelihood function of linear-in-the-parameters NL models is concave in the utility parameters. Thus, conditional on the scaling parameters, full information maximum likelihood (FIML) searches cannot get trapped in local maxima.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:27:y:1993:i:4:p:395-400

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