The likelihood function above can be estimated using the maximum simulated likelihood approach. We use Halton draws in the current research (see Bhat, 2003). The parameters to be estimated in the model structure include the moment parameters characterizing the and the multivariate distributions, the vector for each alternative k (embedded in the scalar within ), and the scalars for each alternative k. We estimate the parameters of the mixed MDCEV-MNL model jointly. However, as in the familiar nested logit model, one can first estimate the vehicle make/model MNL models for each vehicle body type/vintage and then estimate the MDCEV model after constructing logsum terms. However, this two-stage procedure can be quite inefficient. Besides, one has to anyway estimate 20 MNL models (one for each vehicle body type/vintage) simultaneously in the first step to maintain parameter restrictions on variables across “nests”. When undertaking all this, one may as well estimate all parameters jointly.
(13)
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