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  • nested logit: degenerate and dissimilarity parameter

    I made a Nested logit model. Level 1: 8 choices and level 2: 22 choices.
    In type 4, I have only 1 choice in level 1 corresponds to one choice in level 2.

    The dissimilarity parameters are equal to 1 in this case (not surprising).

    Can i run the model normally when i have a an IV parameter than is equal to one?
    The results can be interpreted normally or what should i have to do in this case?

    I tried the commande "constraint 1=[type4_tau]_cons=1" but the model does not run.

    what can i do?

    Thanks in advance for your advices

  • #2
    I am working with this kind of model now, and there is some theoretical literature on that here. For an application, take a look here. I don't have an answer for the command part of the question, but I know that the dissimilarity parameter for the degenerate nest should be set to 1.

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