C8298 - DISCRETE CHOICE MODELS OF CONSUMER BEHAVIOUR

Learning outcomes

At the end of the course the student is able to choose, among several discrete choice models, the specification most adequate to solve a specific problem of market analytics. Moreover, he is able to estimate the model, check the model and interpret the results. In particular the student: - has a deep knowledge of the theory related to the main discrete choice models (Multinomial Logit/Probit Model, Neste Logit/Probit Models, Mixed Logit/Probit Model); - has the competence to apply these models to business contexts through the solution of case studies.

Course contents

The course will cover the following topics:

Foundations of discrete choice modelling: behavioural assumptions and derivation of discrete choice models.

Data for choice analysis: revealed- and stated-preference data, and the design and implementation of discrete choice experiments.

Discrete choice models: multinomial logit, mixed logit, and latent class models. For each model, the course will cover theoretical foundations and specification, estimation, interpretation of results and practical applications.

Case studies based on real-world consumer choice data will be developed during computer laboratory sessions using the Apollo package in R.

Readings/Bibliography

The course will be mainly based on lecture notes and chapters/papers provided through Virtuale. The teacher will refer also to useful chapters in the following books:

Greene, W. (2009). Discrete choice modeling. In Palgrave handbook of econometrics (pp. 473-556). Palgrave Macmillan, London.

Train, K. E. (2009). Discrete choice methods with simulation. Cambridge University Press.

Hess, S., & Daly, A. (Eds.). (2014). Handbook of choice modelling. Edward Elgar Publishing.

Teaching methods

The course combines lectures with computer laboratory sessions devoted to the development of case studies. Applications will use real-world data and be implemented in R.

Given the nature of the course activities and teaching methods, students are required to complete Modules 1 and 2 of the mandatory e-learning training on health and safety in study environments before attending the course.

Mandatory training courses on health and safety in the workplace.

Assessment methods

Attending students can choose between a written exam or the development of an individual or group case study, accompanied by a written report and an oral presentation.

Non-attending students will take the written exam.

Case study: a 4–5-page report including objective, theoretical background, empirical model, data, results, discussion, and conclusions. The oral presentation lasts 10–15 minutes. During the presentation, the teacher may ask questions on the case study and on any topic covered in the course. The final grade is based on the quality of the work (80%) and the clarity of the presentation (20%).

Written exam: 60 minutes, with 4-6 open-ended questions worth 5-7 points each. The maximum score is 31, corresponding to 30 cum laude; the passing grade is 18/30. No textbooks, notes, electronic devices, or other supporting materials are allowed.

Teaching tools

- Lecture slides and notes

- Useful readings (articles, book chapters, etc.)

- Data and codes for tutorials

These materials will be provided and integrated throughout the course, and uploaded on Virtuale platform.

Office hours

See the website of Beatrice Biondi