Some computational issues related to the identification of modal parameters of structures are presented in this paper. Optimal estimation of modal parameters often requires the solution of an overdetermined linear system of equations. Hence the computation of a pseudo‐inverse matrix is involved. In this paper the numerical performance of different algorithms for Moore–Penrose pseudo‐inverse computation have been tested for modal analysis of a four‐flue chimney of a thermoelectrical plant. The computational scheme herein adopted for parameter identification is based on well‐known modal properties and has a fast rate of convergence to solution. The computation of the Rayleigh damping coefficients a and b is an important step in the area of the modal superposition technique. The proposed approach can accurately predict damping ratios and all the eigenvectors without evaluating mass and stiffness matrices. Copyright © 2007 John Wiley & Sons, Ltd.