Modeling Individual Choice with NLOGIT
NLOGIT has become the standard package for estimation and simulation of multinomial discrete choice models. Version 4.0 is a full information maximum likelihood estimator for, among other models, up to four level nested logit models. Many other formulations are included in NLOGIT, including random parameters (mixed logit) models, multinomial probit, many forms of the nested logit model, and several new formulations for panel data. NLOGIT is the only large package for discrete choice analysis that contains the full set of features of an integrated econometrics program (LIMDEP).
NLOGIT 4.0 includes all of LIMDEP 9.0 plus the full set of features in NLOGIT, including the additional data management features, estimators for many types of discrete choice models, and the program simulator.
Data Analysis
NLOGIT will typically be used to analyze individual, cross section data on consumer choices and decisions from multiple alternatives. But, the program is equally equipped for market shares or frequency data, data on rankings of alternatives, and, for several of the estimators, panel data from repeated observation of choice situations. There are several data handling procedures for NLOGIT in addition to all those available in LIMDEP. Details
Model Estimation
NLOGIT supports a greater range of models for discrete choice than any other package. These include the basic multinomial logit model, nested logit models up to four levels, the multinomial probit model and the state of the art estimator for the mixed (random parameters) logit model. In all cases, there are a variety of different forms of the model available.
NLOGIT contains all of the discrete choice estimators supported by LIMDEP, plus the extensions of the discrete choice models which do not appear in LIMDEP. These include:
Model Specification
NLOGIT’s estimation programs are accessed as LIMDEP model commands. Since discrete choice models are often more complicated to specify than other single equation models in LIMDEP, the command setup includes many specifications that are specific to NLOGIT. Details
Inference Tools for Hypothesis Testing
The full set of post estimation and analysis tools in LIMDEP is accessed by NLOGIT. This includes the Wald, likelihood ratio and Lagrange multiplier tests as well as all the matrix algebra and scientific calculator tools. NLOGIT also provides tools specific for discrete choice analysis, including a built-in procedure for testing the IIA assumption of the multinomial logit model.
Simulation
Any model estimated by NLOGIT can be subjected to ‘what if’ analyses using the model simulation package. The base case model produces a set of fitted probabilities for the sample data which aggregate to a prediction of the sample shares for the alternatives in the choice set. The simulator is then used, with the estimation data set or any other compatible data set, to recompute these shares under scenarios that you specify, such as a change in the price of a particular alternative or a change in household incomes. Details