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Discrete choice, part 3: Location and scale normalization in logit models
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I discuss identification in the conditional and multinomial logit models respectively. In particular, I prove why we cannot estimate an intercept in the conditional logit model and why we must normalize the betas for one of the alternatives in the multinomial logit model. Finally, I show why we must normalize the variance in the multinomial logit model (the proof is the same for conditional logit).
In more general terms, these types of identification normalizations are referred to as "scale" and "location" normalization in discrete choice models.
Chapters
00:00 Intro
00:23 Location normalization in conditional logit
3:32 Location normalization in multinomial logit
7:20 Scale normalization in multinomial logit
In more general terms, these types of identification normalizations are referred to as "scale" and "location" normalization in discrete choice models.
Chapters
00:00 Intro
00:23 Location normalization in conditional logit
3:32 Location normalization in multinomial logit
7:20 Scale normalization in multinomial logit
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