8. Non-proportional Substitution Patterns II: The Probit Model

The chapter delves into the multinomial probit model, a sophisticated tool for discrete choice analysis that addresses the limitations of the nested logit model. By incorporating a normal distribution for random utility terms, the probit model accommodates correlations between alternatives, allowing for flexible substitution patterns. However, this flexibility comes at the cost of increased computational complexity, requiring numerical integration techniques such as simulation methods for estimation. The chapter provides a detailed explanation of the model's theoretical foundation, estimation processes, and practical applications, offering a comprehensive guide for specialists seeking advanced methods in choice modeling.