Demand Estimation with Variable Choice Sets: A Likelihood Correction for Nested Logit
可变选择集下的需求估计:嵌套 Logit 的似然修正
We derive the exact likelihood of the Berry (1994) share-form nested logit and show it contains a Jacobian term that depends on nest size and the nesting parameter. Omitting the term biases within-nest substitution estimates wherever choice sets vary across markets. Commonly-used count instruments for the within-nest share fail exclusion when product counts enter demand directly. The corrected likelihood identifies substitution without them, making crowding estimable. We…