2 PROPERTIES OF THE NESTED LOGIT MODEL

This paper presents simple formulae for the utility covariances of the nested legit (NL) model, and based on these defines a ''scaled tree'' that can be used as an aid for the interpretation of estimation, resu lts. The paper also shows that the full information log-likelihood fun ction of linear-in-the-parameters NL models is concave in the utility parameters. Thus, conditional on the scaling parameters, full informat ion maximum likelihood (FIML) searches cannot get trapped in Local max ima.