ApolloChoiceModelling forum

Hi Professor,

I have estimated a nested logit model using Apollo. I wonder how I could calculate the Direct Elasticity. Is that possible to provide an example in calculating it in R? I think for Cross-Elasticity within the nest is the same with Multinominal Logit, how about cross-elasticity between nests?

Thank you!

Hi

other than calculating them analytically, you can approximate them numerically just as in the MNL example MNL_SP_covariates.r

Stephane

Hi Professor Hess,

Thank you for your prompt reply!

I have another question relating to arc elasticity for dummy variables.

I manually changed the variable to 0 and to 1 by adding two new columns, but when I calculate the arc elasticity, it shows an Error in predictions_base[, "auto"]: incorrect number of dimensions. I am not sure whether I calculate it in the wrong way.

I attached the code and description below for you to review.

#add two colume
database$rail_use0 <- c(0:0)
database$rail_use1 <- c(1:1)

#estimate 0 model
database$rail_use = database$rail_use0
apollo_inputs = apollo_validateInputs()
predictions_base = apollo_prediction(NL_model, apollo_probabilities, apollo_inputs, prediction_settings=list(runs=30))

#estimate 1 model
database$rail_use = database$rail_use1
apollo_inputs = apollo_validateInputs()
predictions_new = apollo_prediction(EC_model, apollo_probabilities, apollo_inputs)

#elasticity calculation
(predictions_new[,"rail"]-predictions_base[,"rail"])/(predictions_new[,"rail"]+predictions_base[,"rail"])

Thank you!
Lucia

Lucia

first, your denominator doesn't look correct, as you should only have the base prediction in, not the sum of base and future.

I believe the error you are getting is because for your base prediction, you are using sampling from the asymptotic variance covariance matrix, so try without runs

Stephane

Hi Prof. Hess,

Thank you very much for your clarification, really appreciate it!

Kind Regards,
Lucia