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Decomposing Unobserved Choice Variability In The Presence Of Consumers' Taste Heterogeneity

Author Info

  • Hu, Wuyang
  • Adamowicz, Wiktor L.
  • Veeman, Michele M.

Abstract

Heterogeneous tastes across consumers can be captured by random coefficients in a mixed logit (ML) model. However, other types of factors that may not directly affect taste could cause choices to vary, such as choice context, choice task complexity, and demographic characters. This paper jointly considers taste heterogeneity around reference-dependent attributes and other choice variability through inclusion of a scale function, based on data from a stated preference experiment for bread. Results demonstrate that modeling other sources of choice variability in addition to taste heterogeneity increases the model fit, although the improvement is not dramatic.

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File URL: http://purl.umn.edu/19954
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number 19954.

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Date of creation: 2004
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Handle: RePEc:ags:aaea04:19954
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Keywords: Institutional and Behavioral Economics;

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Cited by:

  1. Hu, Wuyang & Adamowicz, Wiktor L. & Veeman, Michele M., 2005. "Bayesian Analysis of Consumer Choices with Taste, Context, Reference Point and Individual Scale Effects," 2005 Annual meeting, July 24-27, Providence, RI 19296, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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