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st: nested logit tree

From   Solon Moreira <>
To   "" <>
Subject   st: nested logit tree
Date   Mon, 28 Nov 2011 14:39:19 +0100

Dear Stata list readers, 

This is a question regarding the way that I should structure the tree of a nested logit model to get the right output. 

I have a dataset consisting of 1200 firms that buy and sell technologies. I am trying to run a model in which in the first level I can observe how firm-specific variables affect the likelihood of being a supplier instead of a buyer. The way that my model is structured now this part of the nest is shown in my stata output with no problem. However, I am having problem with my second level, I would like the output to show how some alternative specific variables affect the likelihood that buyers and suppliers will have an R&D department. So, I want to produce an output in which the first level explains the likelihood of being a buyer or a supplier and second level the likelihood that the buyer will or not have an R&D department and the supplier will or not have an R&D department. As I mentioned, I am able to produce an output in which I can observe the first level, but in the second level instead of comparing buyers that have R&D with buyers that do not have it (and the same wit!
 h suppliers), my output shows all the 4 final alternatives in the same model, taking one of them as the baseline.      
That is the command I am using to build the tree:
nlogitgen r&d= final_outcome(buyer_n: 1, buyer_w: 2, supplier_n: 3, supplier_w: 4)
nlogitgen buyer_or_supplier= r&d(buyer: buyer_n | buyer_w , supplier: supplier_n | supplier_w)
I could not figure out a way to compare only buyers with and without R&D and suppliers with and without R&D in the second level.

Any suggestions are more than welcome
Very best,

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