Comments on \Alternative models of demand for automobiles" by Charlotte Wojcik

In a recent paper in this journal, Wojcik (2000) argues that the nested logit model "is likely to be superior" to alternative random coefficients logit specifications, like those we and many others have used in recent work (e.g. Berry, Levinsohn, and Pakes (1995), henceforth BLP). Her conclusion is based on a within sample "prediction" exercise. We would like to raise several issues about her conclusion. 1. Most important to the Wojcik's specific conclusions, she uses different independent variables in her "BLP" based predictions as compared to in her nested logit predictions. In particular, for the nested logit predictions she appears to include on the right-hand side an additional variable that is a function of the left-hand side market shares being predicted. This endogenous variable (which would be unknown in a true out-of-sample prediction) could easily account for the apparent superiority of the nested logit, as no similar endog