General Models
As mentioned earlier, calculation and justification of choice probabilities rely on the properties of the error (i.e. the unobservables) distribution function the researcher specifies. Here is the quick overview of frequently used models that each differs in specification
1. Logit:
- Assumes unobserved factors have the same variance with zero correlation across alternatives.
- iid extreme value unobserved factors
- The cumulative distribution of difference in extreme values is Logistics function
- Logistics function has a closed form solution => No simulation necessary.
2. GEV (Generalized extreme value distribution)
- Allows correlation in unobserved factors across alternatives.
- iid extreme value unobserved factors
- The cumulative distribution of difference in extreme values is Logistics function
- Logistics function has a closed form solution => No simulation necessary.
3. Probit
- Unobserved factors have a jointly normal distribution.
- No closed form for the cumulative distribution of normal distribution. Simulation necessary.
4. Mixed logit
- Allows any distribution in unobserved factors
- No closed form for the cumulative distribution of normal distribution. Simulation necessary.
Read more about this topic: Choice Model Simulation
Famous quotes containing the words general and/or models:
“It has been the struggle between privileged men who have managed to get hold of the levers of power and the people in general with their vague and changing aspirations for equality, for justice, for some kind of gentler brotherhood and peace, which has kept that balance of forces we call our system of government in equilibrium.”
—John Dos Passos (1896–1970)
“Today it is not the classroom nor the classics which are the repositories of models of eloquence, but the ad agencies.”
—Marshall McLuhan (1911–1980)