4.14 The Choice Theory Approach to Market
Research
This paper surveys economic choice theory,
stressing developments that permit use of data
from psychometric and conjoint experiments to
produce market demand forecasts. Alternatives to
the widely used multinomial logit model are
summarized, and a new method for estimating
multinomial probits is described. An integration
of choice models with attitudinal scaling and
perceptual mapping, within a latent variable
system, is described. Estimation of such systems
under either "random effects" or "fixed effects"
descriptions of heterogeneity across individuals
is discussed. Issues in the use of choice models
to describe responses from conjoint experiments
are presented. New regression diagnostic tests
for the consistency of multinomial logit
representations are discussed.