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Computation of Elasticity in Discrete Choice Modeling

 
 
Dracir
 
Reply Sat 19 Nov, 2016 05:34 pm
Hello,

I'm working on a discrete choice model, and I'd like to compute the elasticity of some of the parameters, such as the time. So from my discrete choice model, I have the estimation of the beta parameter for time.
Then, I can also compute the market share of a certain alternative.
With these two data, I'd like to use the formula (to use in the case of logit model with linear parameter) :
Elasticity = (1-P)*x*Beta
where P is the market share of the considered alternative, and Beta the estimated parameter of time.

However, in this formula, I don't know how to interpret x which is supposed to be the attribute (in this case the time). Should I just not consider it in the computation, or does it have to be a value ? Like the average time or something like this ?

Let me know if you want clearer explanation
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cicerone imposter
 
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Reply Tue 22 Nov, 2016 06:45 pm
@Dracir,
How would you know market share? Do you know all the suppliers, and their share of the market?
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