Many engineers are confused with stiffness modifiers stuff in ETABS including me. Let me add my cent here.
1. Any reasonable set of stiffness can be used as explained in ACI 318.
2. You have to determine what type of frame you are analyzing; braced or un-braced
3. Whats the analysis type? Strength, service?
4. Code allows use of 0.35,0.7 factors on inertia in chapter 10 of ACI 318 for slenderness effects.
5. Also according to code, you can use the above same model in step 4 for lateral deflections.
6. Now for lateral deflections, if the lateral load is service (like Wind load of ASCE 7-05 and previous) multiply above factors by 1.43 or 1.40 (see code). For strength lateral load like Earthquake, no need to multiply by this factor.
7. Some times you really dont need to apply modifiers at all. For example for strength design.
8. For a two-way frame with membrane slabs at top, you just need to apply 0.5 factor to beam elements. Code allows this which says for strength design you can either
a. use the same modifiers as used for slenderness
b. use 0.5 for beam stems only
In simple words, modifiers are factors to reduce inertia for cracked sections. But if you are doing strength design, why you need the cracked inertia.
And as far as serviceability is concerned, authors like Nilson even argue that a factor of 0.5 as we applied in step 8 can also be skipped because of the following reasons.
a. For positive moment, beam is designed as T section but in ETABS we use rectangular section, Stiffness of T = approx 2 x stiffness of rect. So no need to apply 0.5 inertia factor to beams because T compensates for that. Just use the rectangular section in ETABS.
b. For negative moments, beam is designed as rectangular, and we also model the rectangular section in ETABS. Now the cracking in this section is offset by the continuation of bottom bars into support which have stiffening effect.
I hope that helps. Let me put it as a summary here;
1. Strength & service design with membranes (slab on rigid beams as compared to slabs).
Beams = 0.5
or beams = 0.35 & columns = 0.7 (or whatever ratios just keep it constant).
or no modifiers at all
walls = 0.7 for un-cracked
0.35 for cracked
2. Strength & service design with shells (flat plates etc).
beams and walls same as above
slabs = 0.25 for out-of-plane m factors.
just multiply above factors by 1.43 for service lateral deflections.