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Integrated mixed logit and latent variable models

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  • Vishva Danthurebandara
  • Martina Vandebroek
  • Jie Yu

Abstract

Extending the traditional discrete choice model by incorporating latent psychological factors can help to better understand the individual’s decision-making process and therefore to yield more reliable part-worth estimates and market share predictions. Several integrated choice and latent variable (ICLV) models which merge the conditional logit model with a structural equation model exist in the literature. They assume homogeneity in the part-worths and use latent variables to model the heterogeneity among the respondents. This paper starts from the mixed logit model that describes the heterogeneity in the part-worths and uses the latent variables to decrease the unexplained part of the heterogeneity. The empirical study presented here shows these ICLV models perform very well with respect to model fit and prediction. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Vishva Danthurebandara & Martina Vandebroek & Jie Yu, 2013. "Integrated mixed logit and latent variable models," Marketing Letters, Springer, vol. 24(3), pages 245-259, September.
    • Handle: RePEc:kap:mktlet:v:24:y:2013:i:3:p:245-259
    DOI: 10.1007/s11002-012-9213-2
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    References listed on IDEAS

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    Cited by:

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    3. Sfeir, Georges & Abou-Zeid, Maya & Kaysi, Isam, 2020. "Multivariate count data models for adoption of new transport modes in an organization-based context," Transport Policy, Elsevier, vol. 91(C), pages 59-75.

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    More about this item

    Keywords

    Discrete choice models; Structural equation models; Hierarchical Bayesian estimation; Mixed logit model; Heterogeneity distribution; C11; C25; C90;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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