McFadden's GEV Theorem: The Mathematical Foundation of Nested Logit Models
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YouTubeThe Structural Econ Guy
McFadden's GEV Theorem: The Mathematical Foundation of Nested Logit Models
In this video, we go deep into Daniel McFadden's groundbreaking 1978 theorem that provides the mathematical foundation for Generalized Extreme Value (GEV) models, including nested logit. We explore the conditions under which GEV distributions can exist and demonstrate how both multinomial logit and nested logit emerge as special cases of this ...
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