

Mixed logit with latent variables 

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Heike Link posted on Tuesday, August 12, 2014  1:08 am



Hello, I have estimated a hybrid discrete choice model which consists of a conventional binary logit model and a latent variable part. Both parts where estimated jointly by using MLR with Monte Carlo simulation. The structure of my model is below: Y ON x1x5 (Y is a binary variable, x1x5 are continuous predictors) Y ON LV2 LV1 BY i1 i2 (i1 and i2 are continuous indicators) x6 x7 ON LV1 (x6, x7 are exogenous variables, continuos) LV2 BY i3 i4 i5 i6 (i3 – i6 are categorical indicators) x8 x9 ON LV2 (x8, x9 are exogenous variables, continuous) LV2 ON LV1. The model was aimed at providing a better explanation of Y by including latent variables and this worked out well, the parameters are significant and can well be interpreted. I am now asked by a referee to introduce unobserved consumer heterogeneity. This means that I need to estimate a Mixed Logit model by allowing some parameters to be random, based on assumed heterogeneity distributions such as normal or lognormal. Does Mplus allow estimating a Mixed Logit model which contains also the latent variable part as my model above? Is it possible, for example, to estimate random parameters for Y ON x1x5 within the hybrid model listed above? Many thanks for your clarification. Heike 


If the random effect parameters are identified they can be estimated in Mplus. For example, to add a normally distributed random intercept for Y, just say f BY y; which means that f is the random intercept and its variance is the variance of f. Our website has related discretechoice papers posted under Papers, Miscellaneous, such as Temme, D., Paulssen, M., & Dannewald, T. (2008). Incorporating latent variables into discrete choice models – A simultaneous estimation approach using SEM software. BuR – Business Research, 1, 220237. download paper contact first author show abstract 

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