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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/30694
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| Title: | | On the equivalence of location choice models : conditional logit, nested logit and poisson  |
| Authors: | | Schmidheiny, Kurt Brülhart, Marius |
| Issue Date: | | 2009 |
| Series/Report no.: | | CESifo working paper 2726 |
| 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. |
| Subjects: | | firm location residential choice conditional logit nested logit Poisson count model |
| JEL: | | C25 R30 H73 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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