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Discrete Choice Experiments: A Guide to Model Specification, Estimation and Software

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  • Emily Lancsar

    (Monash University)

  • Denzil G. Fiebig

    (University of New South Wales)

  • Arne Risa Hole

    (University of Sheffield)

Abstract

We provide a user guide on the analysis of data (including best–worst and best–best data) generated from discrete-choice experiments (DCEs), comprising a theoretical review of the main choice models followed by practical advice on estimation and post-estimation. We also provide a review of standard software. In providing this guide, we endeavour to not only provide guidance on choice modelling but to do so in a way that provides a ‘way in’ for researchers to the practicalities of data analysis. We argue that choice of modelling approach depends on the research questions, study design and constraints in terms of quality/quantity of data and that decisions made in relation to analysis of choice data are often interdependent rather than sequential. Given the core theory and estimation of choice models is common across settings, we expect the theoretical and practical content of this paper to be useful to researchers not only within but also beyond health economics.

Suggested Citation

  • Emily Lancsar & Denzil G. Fiebig & Arne Risa Hole, 2017. "Discrete Choice Experiments: A Guide to Model Specification, Estimation and Software," PharmacoEconomics, Springer, vol. 35(7), pages 697-716, July.
  • Handle: RePEc:spr:pharme:v:35:y:2017:i:7:d:10.1007_s40273-017-0506-4
    DOI: 10.1007/s40273-017-0506-4
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    References listed on IDEAS

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    1. Robert Bartels & Denzil Fiebig & Arthur Soest, 2006. "Consumers and experts: an econometric analysis of the demand for water heaters," Empirical Economics, Springer, vol. 31(2), pages 369-391, June.
    2. Mickael Bech & Dorte Gyrd‐Hansen, 2005. "Effects coding in discrete choice experiments," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 1079-1083, October.
    3. Tami L. Mark & Joffre Swait, 2004. "Using stated preference and revealed preference modeling to evaluate prescribing decisions," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 563-573, June.
    4. Denzil G. Fiebig & Stephanie Knox & Rosalie Viney & Marion Haas & Deborah J. Street, 2011. "Preferences for new and existing contraceptive products," Health Economics, John Wiley & Sons, Ltd., vol. 20(S1), pages 35-52, September.
    5. Arne Risa Hole, 2007. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Health Economics, John Wiley & Sons, Ltd., vol. 16(8), pages 827-840, August.
    6. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
    7. Harris, Katherine M. & Keane, Michael P., 1998. "A model of health plan choice:: Inferring preferences and perceptions from a combination of revealed preference and attitudinal data," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 131-157, November.
    8. Daniele Pacifico & Hong il Yoo, 2012. "A Stata module for estimating latent class conditional logit models via the Expectation-Maximization algorithm," Discussion Papers 2012-49, School of Economics, The University of New South Wales.
    9. Denzil G. Fiebig & Rosalie Viney & Stephanie Knox & Marion Haas & Deborah J. Street & Arne R. Hole & Edith Weisberg & Deborah Bateson, 2017. "Consideration Sets and Their Role in Modelling Doctor Recommendations About Contraceptives," Health Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 54-73, January.
    10. David Hensher & William Greene, 2010. "Non-attendance and dual processing of common-metric attributes in choice analysis: a latent class specification," Empirical Economics, Springer, vol. 39(2), pages 413-426, October.
    11. Mandy Ryan & Fernando San Miguel, 2003. "Revisiting the axiom of completeness in health care," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 295-307, April.
    12. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    13. Peter Ghijben & Emily Lancsar & Silva Zavarsek, 2014. "Preferences for Oral Anticoagulants in Atrial Fibrillation: a Best–Best Discrete Choice Experiment," PharmacoEconomics, Springer, vol. 32(11), pages 1115-1127, November.
    14. Emily Lancsar & Jordan Louviere, 2006. "Deleting ‘irrational’ responses from discrete choice experiments: a case of investigating or imposing preferences?," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 797-811, August.
    15. Yuanyuan Gu & Arne Risa Hole & Stephanie Knox, 2013. "Fitting the generalized multinomial logit model in Stata," Stata Journal, StataCorp LP, vol. 13(2), pages 382-397, June.
    16. Madeleine T. King & Jane Hall & Emily Lancsar & Denzil Fiebig & Ishrat Hossain & Jordan Louviere & Helen K. Reddel & Christine R. Jenkins, 2007. "Patient preferences for managing asthma: results from a discrete choice experiment," Health Economics, John Wiley & Sons, Ltd., vol. 16(7), pages 703-717, July.
    17. Hall, Jane & Fiebig, Denzil G. & King, Madeleine T. & Hossain, Ishrat & Louviere, Jordan J., 2006. "What influences participation in genetic carrier testing?: Results from a discrete choice experiment," Journal of Health Economics, Elsevier, vol. 25(3), pages 520-537, May.
    18. Meliyanni Johar & Denzil G. Fiebig & Marion Haas & Rosalie Viney, 2013. "Using repeated choice experiments to evaluate the impact of policy changes on cervical screening," Applied Economics, Taylor & Francis Journals, vol. 45(14), pages 1845-1855, May.
    19. Lancsar, Emily & Louviere, Jordan & Flynn, Terry, 2007. "Several methods to investigate relative attribute impact in stated preference experiments," Social Science & Medicine, Elsevier, vol. 64(8), pages 1738-1753, April.
    20. Ossama Elshiewy & German Zenetti & Yasemin Boztug, 2017. "Differences Between Classical and Bayesian Estimates for Mixed Logit Models: A Replication Study," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(2), pages 470-476, March.
    21. Emily Lancsar & Elizabeth Savage, 2004. "Deriving welfare measures from discrete choice experiments: inconsistency between current methods and random utility and welfare theory," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 901-907, September.
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