Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30694
Authors: 
Schmidheiny, Kurt
Brülhart, Marius
Year of Publication: 
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

Files in This Item:
File
Size
295.17 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.