This paper shows that Hausman-McFadden and related tests for the multinomial logit model are not informative about failure of IIA, but only about specification error in the deterministic part of the utilities attached to choice alternatives. It is shown that the multinomial logit cannot be...

This paper considers specification tests for the multinomial logit model if alternative-specificconstants are used to absorb the impact of omitted variables in the deterministic parts of theutilities. It finds that such tests then do not have any power. This implies that such tests have nopower...

An emerging quantitative spatial economics literature models commuting interactions by a gravity equation that is mathematically equivalent to a multinomial logit model. This model is widely viewed as restrictive because of the independence of irrelevant alternatives (IIA) property that links...

Storable products allow consumers to time their purchases to exploit price fluctuations. It has been documented that during promotions consumers buy more. The additional purchases are potentially intended not only for current use, but to be stockpiled for future consumption. This paper discusses...

Recently Meyer and Ormiston (1999) made an important contribution to resolving the second order condition problem for the case of deductible insurance. Using the level of expected indemnification rather than the level of deductible, Meyer and Ormiston (1999) showed that the second order...

Although rebates are widely employed, redemption is not effort-free, and the hassle of redemption is an important decision variable for buyers. The current research examines the impact of hassle cost on optimal rebate strategy. An analytical model is developed that simultaneously determines the...

There is a substantial literature that documents the presence of state dependent utility with packaged goods data. Typically, a form of brand loyalty is detected whereby there is a higher probability of purchasing the same brand as has been purchased in the recent past. The economic significance...