st: Conditional Logit

["Yvonne Capstick" <yvonnecapstick@hotmail.com>]

Hi,

I'm using the Stata clogit command and have read 
http://www.stata.com/support/faqs/stat/clogit.html and the manual at  
http://www.stata-press.com/manuals/stata8/clogit.pdf. I am confused by one 
fundamental thing.

As I understand it, the conditional logit model is used for mutually 
exclusive choices. You can only have one Yes answer within each group. The 
canonical model is McFadden's (1974) transport choice model (which is 
mentioned in the manual) where you can choose either bus or train or car. 
This is consistent with the fact that the likelihood function is p(i) = 
exp(beta*Xi)/Sum(exp(beta*Xi): with more than one Yes answer, the 
probabilities won't sum to 1.

However, Stata does allow you to have multiple positive observations within 
a group, as in the first example in the manual. How can this be, since the 
probabilities should be summing to 1? My initial reading is that what the 
Stata manual example is doing isn't the McFadden multiple choice model, but 
a fixed effects logit model, and perhaps the clogit command accommodates 
both models. However, the Stata manual also says both models are 
computationally equivalent, which I am confused by since the McFadden model 
doesn't allow for multiple positive observations.

Any advice appreciated.

Yvonne

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