Discrete Choice Methods

Author(s):  
Garrett Glasgow ◽  
R. Michael Alvarez

This article describes the statistical models commonly used to study discrete choices. It concentrates on the ‘basic’ discrete choice models, and the theoretical choice situations that lead to these models. Specifically the choice situation addressed include: the ordered choice situation and the unordered choice situation. In addition, the article discusses two extensions of the basic discrete choice models commonly seen in political science research — models allowing for heteroskedasticity in the choices made across political agents (such as the heteroskedastic probit), and models that estimate substitution patterns across choice alternatives (such as the multinomial probit and mixed logit). Suggestions for further reading are also given.

2003 ◽  
Vol 11 (4) ◽  
pp. 316-344 ◽  
Author(s):  
Curtis S. Signorino

Social scientists are often confronted with theories in which one or more actors make choices over a discrete set of options. In this article, I generalize a broad class of statistical discrete choice models, with both well-known and new nonstrategic and strategic special cases. I demonstrate how to derive statistical models from theoretical discrete choice models and, in doing so, I address the statistical implications of three sources of uncertainty: agent error, private information about payoffs, and regressor error. For strategic and some nonstrategic choice models, the three types of uncertainty produce different statistical models. In these cases, misspecifying the type of uncertainty leads to biased and inconsistent estimates, and to incorrect inferences based on estimated probabilities.


2016 ◽  
Vol 13 (4) ◽  
pp. 356-379 ◽  
Author(s):  
Han Dong ◽  
Eran Ben-Elia ◽  
Cinzia Cirillo ◽  
Tomer Toledo ◽  
Joseph N. Prashker

Author(s):  
Scott Ferguson ◽  
Andrew Olewnik ◽  
Phil Cormier

The paradigm of mass customization strives to minimize the tradeoffs between an ‘ideal’ product and products that are currently available. However, the lack of information relation mechanisms that connect the domains of marketing, engineering, and distribution have caused significant challenges when designing products for mass customization. For example, the bridge connecting the marketing and engineering domains is complicated by the lack of proven tools and methodologies that allow customer needs and preferences to be understood at a level discrete enough to support true mass customization. Discrete choice models have recently gained significant attention in engineering design literature as a way of expressing customer preferences. This paper explores how information from choice-based conjoint surveys might be used to assist the development of a mass customizable MP3 player, starting from 140 student surveys. The authors investigate the challenges of fielding discrete choice surveys for the purpose of mass customization, and explore how hierarchical Bayes mixed logit and latent class multinomial logit models might be used to understand the market for customizable attributes. The potential of using discrete choice models as a foundation for mathematically formulating mass customization problems is evaluated through an investigation of strengths and limitations.


2021 ◽  
Vol 14 (1) ◽  
pp. 669-691
Author(s):  
Nguyen Cao Y

This study presents a location choice model that incorporates urban spatial effects for enterprises. A modeling framework is developed to analyze decisions regarding location choice for enterprises using a series of discrete choice models including multinomial logit without any urban spatial effects, multinomial logit incorporating urban spatial effects, and mixed logit incorporating urban spatial effects. In this framework, urban spatial effects, such as the urban spatial correlation among enterprises in deterministic terms and the urban spatial correlation among zones in the error term, are captured by mixed logit models in particular and discrete choice models in general. The results indicate that the urban spatial effects and the land prices in a given zone strongly affect the decision-making process of all the enterprises in the Tokyo metropolitan area. Moreover, the important role of urban spatial effects in the proposed model will be clarification through comparing the three above models. This comparison will be implemented on the basis of three types of indicators such as the log likelihood ratio, Akaike information indicator, and hit ratio of each model.


2018 ◽  
Vol 1 (1) ◽  
pp. 21-37
Author(s):  
Bharat P. Bhatta

This paper analyzes and synthesizes the fundamentals of discrete choice models. This paper alsodiscusses the basic concept and theory underlying the econometrics of discrete choice, specific choicemodels, estimation method, model building and tests, and applications of discrete choice models. Thiswork highlights the relationship between economic theory and discrete choice models: how economictheory contributes to choice modeling and vice versa. Keywords: Discrete choice models; Random utility maximization; Decision makers; Utility function;Model formulation


Author(s):  
Benjamin J. Gillen ◽  
Sergio Montero ◽  
Hyungsik Roger Moon ◽  
Matthew Shum

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