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About Attitudes and Perceptions: Finding the Proper Way to Consider Latent Variables in Discrete Choice Models

Author

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  • Francisco J. Bahamonde-Birke
  • Uwe Kunert
  • Heike Link
  • Juan de Dios Ortúzar

Abstract

We provide an in-depth theoretical discussion about the differences between attitudes and perceptions, as well as an empirical exercise to analyze its effects. This discussion is of importance, as the large majority of papers considering attitudinal latent variables, just consider those as attributes affecting directly the utility of a certain alternative while systematic taste variations are rarely taken into account and perceptions are normally completely ignored. The results of our case study show that perceptions may indeed affect the decision making process and that they are able to capture a significant part of the variability that is normally explained by alternative specific constants. In the same line, our results indicate that attitudes may be a reason for systematic taste variations, and that a proper categorization of the latent variables, in accordance with the underlying theory, may outperform the customary assumption of linearity.

Suggested Citation

  • Francisco J. Bahamonde-Birke & Uwe Kunert & Heike Link & Juan de Dios Ortúzar, 2015. "About Attitudes and Perceptions: Finding the Proper Way to Consider Latent Variables in Discrete Choice Models," Discussion Papers of DIW Berlin 1474, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1474
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    References listed on IDEAS

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    More about this item

    Keywords

    Hybrid Discrete Choice Modelling; Latent Variables; Attitudes; Perceptions;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

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