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Semiparametric Bayesian Estimation of Random Coefficients Discrete Choice Models

Author

Listed:
  • Sylvie Tchumtchoua

    (University of Connecticut)

  • Dipak K. Dey

    (University of Connecticut)

Abstract

Heterogeneity in choice models is typically assumed to have a normal distribution in both Bayesian and classical setups. In this paper, we propose a semiparametric Bayesian framework for the analysis of random coefficients discrete choice models that can be applied to both individual as well as aggregate data. Heterogeneity is modeled using a Dirichlet process prior which varies with consumers characteristics through covariates. We develop a Markov chain Monte Carlo algorithm for fitting such model, and illustrate the methodology using two different datasets: a household level panel dataset of peanut butter purchases, and supermarket chain level data for 31 ready-to-eat breakfast cereals brands.

Suggested Citation

  • Sylvie Tchumtchoua & Dipak K. Dey, 2007. "Semiparametric Bayesian Estimation of Random Coefficients Discrete Choice Models," Food Marketing Policy Center Research Reports 102, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:zwi:fpcrep:102
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    File URL: http://fmpc.uconn.edu/publications/rr/rr102.pdf
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    References listed on IDEAS

    as
    1. De Iorio, Maria & Muller, Peter & Rosner, Gary L. & MacEachern, Steven N., 2004. "An ANOVA Model for Dependent Random Measures," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 205-215, January.
    2. J. Miguel Villas-Boas & Russell S. Winer, 1999. "Endogeneity in Brand Choice Models," Management Science, INFORMS, vol. 45(10), pages 1324-1338, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dependent Dirichlet process; Discrete choice models; Heterogeneity; Markov chain; Monte Carlo;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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