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Multinomial Probit Estimation of Spatially Interdependent Choices: An Empirical Comparison of Two New Techniques

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  • Denis Bolduc

    (Groupe de Recherche en Économie de l'Énergie, de l'Environnement et des Ressources Naturelles, Département d'Économique, Université Laval, Québec City, Québec, Canada GCK 7P4, dbol@ecn.ulaval.ca)

  • Bernard Fortin

    (Centre de Recherche en Économie et Finance Appliquée, Département d' Économique, Université Laval, Québec City, Québec, Canada GCK 7P4, bfor@ecn.ulaval.ca)

  • Stephen Gordon

    (Centre de Recherche en Économie et Finance Appliquée, Département d' Économique, Université Laval, Québec City. Québec, Canada C/K 7P4, sgor@ecn.ulaval.ca)

Abstract

The paper compares the empirical performance of two recently suggested techniques for estimating Multinomial Probit (MNP) models. The application concerns the choice of the first practice location of general practitioners in Quebec (Canada). Regional similarities are accounted for by modeling interdependent choice decisions. One technique is a simulated maximum likelihood based approach that relies on a Geweke, Hajivassiliou, and Keane (GHK) choice probability simulator, and the other one exploits the Gibbs sampler with data augmentation. The results indicate that both estimation techniques give similar results. Compared to its competitor, the Gibbs approach is much simpler to implement both conceptually and computationally.

Suggested Citation

  • Denis Bolduc & Bernard Fortin & Stephen Gordon, 1997. "Multinomial Probit Estimation of Spatially Interdependent Choices: An Empirical Comparison of Two New Techniques," International Regional Science Review, , vol. 20(1-2), pages 77-101, April.
    • Handle: RePEc:sae:inrsre:v:20:y:1997:i:1-2:p:77-101
    DOI: 10.1177/016001769702000105
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    References listed on IDEAS

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