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Choice Modeling and SEM

In: Quantitative Marketing and Marketing Management

Author

Listed:
  • Lutz Hildebrandt

    (University of Vienna)

  • Dirk Temme

    (Schumpeter School of Business and Economics – Bergische Universität Wuppertal)

  • Marcel Paulssen

    (Univerity of Geneva – HEC Geneva)

Abstract

The paper shows how two dominant methodological approaches in quantitative marketing research of the last decades can be integrated. Combining the strengths of covariance structure analysis to control for measurement errors and the ability to predict choice behavior via the Multinomial Logit (MNL) model creates a powerful hybrid approach – the Integrated Choice and Latent variable (ICLV) model – for marketing research. We document the basic features of this approach and present an example which illustrates how the ICLV model can be used to explain travel mode choice. The hybrid modeling framework provides several advantages: (1) it gives a more realistic and comprehensive representation of the choice process taking place in the consumer’s “black box”; (2) it provides greater explanatory power; (3) it helps to remedy the biasing effect of neglecting important latent variables to explain choice behavior, thus allowing for a more accurate assessment of how marketing influences customers’ choice behavior.

Suggested Citation

  • Lutz Hildebrandt & Dirk Temme & Marcel Paulssen, 2012. "Choice Modeling and SEM," Springer Books, in: Adamantios Diamantopoulos & Wolfgang Fritz & Lutz Hildebrandt (ed.), Quantitative Marketing and Marketing Management, edition 127, chapter 3, pages 63-80, Springer.
    • Handle: RePEc:spr:sprchp:978-3-8349-3722-3_3
    DOI: 10.1007/978-3-8349-3722-3_3
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    Citations

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    Cited by:

    1. Joseph F. Hair & Christian M. Ringle & Siegfried P. Gudergan & Andreas Fischer & Christian Nitzl & Con Menictas, 2019. "Partial least squares structural equation modeling-based discrete choice modeling: an illustration in modeling retailer choice," Business Research, Springer;German Academic Association for Business Research, vol. 12(1), pages 115-142, April.
    2. Daziano, Ricardo A., 2015. "Inference on mode preferences, vehicle purchases, and the energy paradox using a Bayesian structural choice model," Transportation Research Part B: Methodological, Elsevier, vol. 76(C), pages 1-26.
    3. William Nikolakis & Doina Olaru & Andreas Kallmuenzer, 2022. "What motivates environmental and social sustainability in family firms? A cross‐cultural survey," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2351-2364, July.

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