Stated Choice Methods: Analysis and Applications

by Jordan J. Louviere , David A. Hensher , Joffre D. Swait , With contributions by Wiktor Adamowicz

• ISBN13: 9780521788304
• ISBN10: 0521788307
• Format: Paperback
• Copyright: 2000-10-23
• Publisher: Cambridge University Press

Summary

Understanding and predicting the behaviour of decision makers when choosing among discrete goods has been one of the most fruitful areas of applied research over the last thirty years. An understanding of individual consumer behaviour can lead to significant changes in product or service design, pricing strategy, distribution channel and communication strategy selection, as well as public welfare analysis. This graduate and practitioner guide deals with the study and prediction of consumer choice behaviour, concentrating on stated preference (SP) methods - placing decision makers in controlled experiments that yield hypothetical choices - rather than revealed preferences (RP) - actual choices in the market. It shows how SP methods can be implemented, from experimental design to econometric modelling, and suggests how to combine RP and SP data to get the best from each type. The book also presents an update of econometric approaches to choice modelling.

Table of Contents

List of figures	ix
List of tables	xi
Acknowledgements	xv
Choosing as a way of life	1	(19)
Introduction	1	(1)
Decision making and choice behaviour	2	(6)
Conceptual framework	8	(2)
The world of choice is complex: the challenge ahead	10	(10)
Choosing a residential telecommunications bundle	19	(1)
Introduction to stated preference models and methods	20	(14)
Introduction	20	(1)
Preference data come in many forms	20	(5)
Preference data consistent with RUT	25	(9)
Choosing a choice model	34	(49)
Introduction	34	(1)
Setting out the underlying behavioural decision framework	35	(2)
Random utility maximisation	37	(7)
The basic choice model - a particular model formulation	44	(3)
Statistical estimation procedure	47	(4)
Model outputs	51	(6)
Behavioural outputs of choice models	57	(5)
A simple illustration of the basic model	62	(3)
Linking to the later chapters	65	(18)
Maximum likelihood estimation technique	66	(6)
Linear probability and generalised least squares models	72	(11)
Experimental design	83	(28)
Introduction	83	(1)
Factorial designs	84	(5)
Fractional factorial designs	89	(5)
Practical considerations in fractional designs	94	(2)
Design strategies for simple SP experiments	96	(15)
Design of choice experiments	111	(27)
Introduction	111	(1)
Multiple choice experiments	112	(7)
General design principles for choice experiments	119	(7)
Availability designs for labelled alternatives	126	(12)
Some popular choice designs	131	(7)
Relaxing the IID assumption - introducing variants of the MNL model	138	(75)
Setting the context for behaviourally more plausible models	138	(4)
Deriving the mean and variance of the extreme value type 1 distribution	142	(2)
Introduction to the nested logit model	144	(10)
Empirical illustration	154	(8)
The nested logit model - empirical examples	162	(14)
Tests of overall model performance for nested models	176	(6)
Conclusions and linkages between the MNL/NL models and more complex models	182	(31)
Detailed characterisation of the nested logit model	183	(6)
Advanced discrete choice methods	189	(24)
Complex, non-IID multiple choice designs	213	(14)
Introduction	213	(1)
Designs for alternatives with non-constant error variances	214	(1)
Designs for portfolio, bundle or menu choices	215	(11)
Summary	226	(1)
Combining sources of preference data	227	(25)
Appreciating the opportunity	227	(1)
Characteristics of RP and SP data	228	(5)
The mechanics of data enrichment	233	(10)
Is it always possible to combine preference data sources?	243	(5)
A general preference data generation process	248	(3)
Summary	251	(1)
Implementing SP choice behaviour projects	252	(31)
Introduction	252	(1)
Components of the choice process	252	(3)
The steps in an SP choice study	255	(27)
Summary	282	(1)
Marketing case studies	283	(15)
Introduction	283	(1)
preference heterogeneity vs. variance heteroscedasticity	283	(9)
choice set generation analysis	292	(5)
Summary	297	(1)
Transportation case studies	298	(31)
Introduction	298	(1)
introducing a new alternative: high speed rail and the random effects HEV model in an SP-RP context	299	(2)
high speed rail and random effects HEV in a switching context	301	(5)
valuation of travel time savings and urban route choice with tolled options in an SP context	306	(9)
establishing a fare elasticity regime for urban passenger transport: non-concession commuters with SP-RP and HEV	315	(13)
Conclusions to chapter	328	(1)
Environmental valuation case studies	329	(25)
Introduction	329	(1)
Environmental valuation: theory and practice	329	(2)
use values - recreational hunting site choices	331	(12)
passive use values	343	(7)
The passive use value controversy: can SP help?	350	(2)
Conclusions	352	(2)
Cross validity and external validity of SP models	354	(28)
Introduction	354	(2)
A brief review of preference model comparisons	356	(1)
Preference regularities	357	(6)
Procedures for testing preference regularity	363	(6)
Empirical case studies and results	369	(10)
Summary and conclusions	379	(3)
References	382	(17)
Index	399