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On heterogeneous latent class models with applications to the analysis of rating scores

Author

Listed:
  • Aurélie Bertrand

  • Christian Hafner

Abstract

Discovering the preferences and the behaviour of consumers is a key challenge in marketing. Information about such topics can be gathered through surveys in which the respondents must assign a score to a number of items. A strategy based on different latent class models can be used to analyze such data and achieve this objective: it consists in identifying groups of consumers whose response patterns are similar and characterizing them in terms of preferences and covariates. The basic latent class model can be extended by including covariates to model differences in (1) latent class probabilities and (2) conditional probabilities. A strategy for fitting and choosing a suitable model among them is proposed taking into account identifiability issues, the identification of potential covariates and the checking of goodness-of-fit. The tools to perform this analysis are implemented in the R package covLCA available from CRAN. We illustrate and explain the application of this strategy using data about the preferences of Belgian households for supermarkets. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Aurélie Bertrand & Christian Hafner, 2014. "On heterogeneous latent class models with applications to the analysis of rating scores," Computational Statistics, Springer, vol. 29(1), pages 307-330, February.
  • Handle: RePEc:spr:compst:v:29:y:2014:i:1:p:307-330
    DOI: 10.1007/s00180-013-0450-5
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    References listed on IDEAS

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    4. Sunil Kumar & Zakir Husain & Diganta Mukherjee, 2015. "Assessing Consistency of Consumer Confidence Data using Dynamic Latent Class Analysis," Papers 1509.01215, arXiv.org.

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    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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