CHAPTER 2 Flashcards
1
Q
Choice experiments
A
Evaluate how different attributes of a product affect people’s buying
2
Q
Utility theory
A
Consumers choose products that they find most attractive (provide them with the highest utility)
3
Q
Max likelihood estimation
A
Parameters that maximize the likelihood thet the observed data actually occurs
4
Q
Dummy coding
A
Difference in the effect across the categories
5
Q
Effect coding
A
Difference in the average across the categories
6
Q
Three ways to adapt unobserved heterogeneity
A
- individual level models
- latent class model
- mixed model
7
Q
Individual level models
A
- separate β for each individual
8
Q
Latent class model
A
- divide de consumers into separate segments depending on their preferences
- researchers will esrtimate the prob of belonging to a segment
9
Q
Mixed model
A
- individuals have different preferences
- parameter values are normally distributed across the population
