Abstract
The paper shows how two dominant methodological approaches in quantitative marketing research of the last decades can be integrated. Combining the strengths of covariance structure analysis to control for measurement errors and the ability to predict choice behavior via the Multinomial Logit (MNL) model creates a powerful hybrid approach – the Integrated Choice and Latent variable (ICLV) model – for marketing research. We document the basic features of this approach and present an example which illustrates how the ICLV model can be used to explain travel mode choice. The hybrid modeling framework provides several advantages: (1) it gives a more realistic and comprehensive representation of the choice process taking place in the consumer’s “black box”; (2) it provides greater explanatory power; (3) it helps to remedy the biasing effect of neglecting important latent variables to explain choice behavior, thus allowing for a more accurate assessment of how marketing influences customers’ choice behavior.
This research was supported by the Deutsche Forschungsgemeinschaft through the SFB 649 “Economic Risk”.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Literature
Anderson, J. C./Gerbing, D. W. (1988): Structural equation modeling in practice: A review and recommended two-step approach, in: Psychological Bulletin, Vol. 103, 3, pp. 411–423.
Ashok, K./Dillon, W. R./Yuan, S. (2002): Extending Discrete Choice Models to Incorporate Attitudinal and Other Latent Variables, in: Journal of Marketing Research, Vol. 39, 1, pp. 31–46.
Bagozzi, R. P. (1998): A Prospectus for Theory Construction in Marketing: Revisited and Revised, in: Hildebrandt, L./Homburg, C. (eds.): Die Kausalanalyse, Stuttgart: Schäffer-Poeschel, pp. 47–81.
Bamberg, S. (1996): Allgemeine oder spezifische Einstellungen bei der Erklärung umweltschonenden Verhaltens? [General or specific attitudes as predictors of environmentally friendly behavior?], in: Zeitschrift für Sozialpsychologie, Vol. 27, 1, pp. 47–60. (in German)
Bamberg, S./Kühnel, S. (1998): Überzeugungssysteme in einem zweistufigen Modell rationaler Handlungen [Systems of conviction in a two-stage model of rational behavior], in: Zeitschrift für Soziologie, Vol. 27, 4, pp. 256–270. (in German)
Ben-Akiva, M./Lerman, S. R. (1985): Discrete choice analysis: Theory and application to travel demand, Cambridge: MIT Press.
Ben-Akiva, M./McFadden, D./Gärling, T./Gopinath, D./Walker, J. L./Bolduc, D./Börsch-Supan, A./Delquié, P./Larichev, O./Morikawa, T./Polydoropoulou, A./Rao, V. (1999): Extended Framework for Modeling Choice Behavior, in: Marketing Letters, Vol. 10, 3, pp. 187–203.
Ben-Akiva, M./McFadden, D./Train, K./Walker, J. L./Bhat, C./Bierlaire, M./Bolduc, D./Börsch- Supan, A./Brownstone, D./Bunch, D. S./Daly, A./de Palma, A./Gopinath, D./Karlstrom, A./Munizaga, M. A. (2002a): Hybrid Choice Models: Progress and Challenges, in: Marketing Letters, Vol. 13, 3, pp. 163–175.
Ben-Akiva, M./Walker, J./Bernardino, A. T./Gopinath, D. A./Morikawa, T./Polydoropoulou, A. (2002b): Integration of choice and latent variable models, in: Hani S. Mahmassani (ed.): In perpetual motion: Travel behaviour research opportunities and application challenges, Oxford: Elsevier Science Ltd., pp. 431–470.
Bierlaire, M. (2003): BIOGEME: A Free Package for the Estimation of Discrete Choice Models, Proceedings of the 3rd Swiss Transportation Research Conference, Ascona, Switzerland.
Bodopati, A. V./Drolet, A. (2005): A Hybrid Choice Model That Uses Actual and Ordered Attribute Value Information, in: Journal of Marketing Research, Vol. 42, 3, pp. 256–265.
Bolduc, D./Giroux, A. (2005): The Integrated Choice and Latent Variable (ICLV) Model: Handout to accompany the estimation software, Départment d’économique, Université Laval.
Bolduc, D./Ben-Akiva, M./Walker, J. L./Michaud, A. (2005): Hybrid Choice Models with Logit Kernel: Applicability to Large Scale Models, in: Lee-Gosselin, M./Doherty, S.T. (eds.), Integrated Land-Use and Transportation Models: Behavioral Foundations, Amsterdam: Elsevier, pp. 275–302.
Bolduc, D./Alvarez Daziano, R. (2010): On Estimation of Hybrid Choice Models, in: Hess, S./Daly, A (eds.): Choice Modeling: The State-of-the-Art and the State-of-Practice, Bingley, UK: Emerald, pp. 259–288.
Bollen, K. A. (1989): Structural Equations with Latent Variables. New-York: Wiley-Interscience
Chintagunta, P. K./Jain, D. C./Vilcassim, N. J. (1991): Investigating heterogeneity in brand preferences in logit models for panel data, Journal of Marketing Research, Vol. 28, 4, pp. 417–428.
Choo, S./Mokhtarian, P. L. (2004): What type of vehicle do people drive? The role of attitude and lifestyle in influencing vehicle type choice, in: Transportation Research Part A: Policy and Practice, Vol. 38, 3, pp. 201–222.
Dellaert, G. C./Stremersch, S. (2005): Marketing Mass-Customized Products: Striking a Balance Between Utility and Complexity, in: Journal of Marketing Research, Vol. 42, 2, pp. 219–227.
Dillon, W. R./ Böckenholt, U./Smith de Borrero, M./Bozdogan, H./de Sarbo, W./Gupta, S./Kamakura, W./Kumar, A./Ramaswamy, B./Zenor, M. (1994): Issues in the Estimation and Application of Latent Structure Models of Choice, in: Marketing Letters, Vol. 5, 4, pp. 323–334.
Guadagni, P. M./Little, J. D. C. (1983): A Logit Model of Brand Choice Calibrated on Scanner Data, in: Marketing Science, Vol. 2, 3, pp. 203–238.
Hildebrandt, L./Temme, D. (2006): Probleme der Validierung mit Strukturgleichungsmodellen [Problems in validation with structural equation models], in: Die Betriebswirtschaft, Vol. 66, 6, pp. 618–639. (in German)
Jöreskog K. G./Goldberger, A. S. (1975): Estimation of a Model with Multiple Indicators and Multiple Causes of a Single Latent Variable, in: Journal of the American Statistical Association, Vol. 70, 351, pp. 631–639.
Kamakura, W./Russell, G. J. (1989): A probabilistic choice model for market segmentation and elasticity structure, in: Journal of Marketing Research, Vol. 26, 4, pp. 379–390.
Lanzendorf, M. (2002): Mobility styles and behaviour – Application of a lifestyle approach to leisure travel, in: Transportation Research Record, Vol. 1807, pp. 163–173.
McCarthy, J. A./Shrum, L. J. (1994): The recycling of solid wastes: Personal value orientation, and attitudes about recycling as antecedents of recycling behavior, in: Journal of Business Research, Vol. 30, 1, pp. 53–62.
McFadden, D. L. (1986): The choice theory approach to marketing research, in: Marketing Science, Vol. 5, 4, pp. 275–297.
Morikawa, T./Ben-Akiva, M./McFadden, D. L. (2002): Discrete Choice Models Incorporating Revealed Preferences and Psychometric Data, in: Franses, P. H./Montgomery, A. L. (eds.): Econometric Models in Marketing, pp. 29–55.
Muthén, L. K./Muthén, B. O. (1998–2007): Mplus User’s Guide. 5th ed., Los Angeles: Muthén & Muthén.
Muthén, L. K./Muthén, B. O. (1998–2011): Mplus User’s Guide. 6th ed., Los Angeles: Muthén & Muthén.
Schmid, K.-P. (2003): Begrenzt einsatzfähig [Limited fitness for use], in: Die Zeit, Vol. 21. (in German)
Schwartz, S. H. (2003): A proposal for measuring value orientations across nations, in: European Social urvey: The questionnaire development package of the European Social Survey, Chapter 7, pp. 259–319.
Schwartz, S. H./Melech, G./Lehmann, A./Burgess, S./Harris, M./Owens, V. (2001): Extending the cross-cultural validity of the theory of basic human values with a different method of measurement, in: Journal of Cross Cultural Psychology, Vol. 32, 5, pp. 519–542.
Skrondal, A./Rabe-Hesketh, S. (2004): Generalized latent variable modeling, Boca Raton: Chapman & Hall.
Temme, D./Paulssen, M./Dannewald T. (2007): Integrating Latent Variables in Discrete Choice Models – How Higher-Order Values and Attitudes Determine Consumer Choice, Discussion Paper No. 65, SFB 649 Economic Risk, Humboldt University Berlin.
Temme, D./Paulssen, M./Dannewald T. (2008): Incorporating Latent Variables into Discrete Choice Models – A Simultaneous Estimation Approach Using SEM Software, in: BuR – Business Research, Vol. 1, 2, pp. 220–237.
Thøgersen, J./Grunert-Beckmann, S. C. (1997): Values and attitude formation towards emerging attitude objects: From recycling to general waste minimizing behavior, in: Advances in Consumer Research, Vol. 24, pp. 182–189.
Train, K. E. (1978): A validation test of a disaggregate mode choice model: Transportation Research Part A: Policy and Practice, Vol. 12, 2, pp. 167–174.
Vredin Johansson, M./Heldt, T./Johansson, P. (2005): Latent variables in a travel mode choice model: Attitudinal and behavioural indicator variables, Working Paper 2005:5, Uppsala University.
Vredin Johansson, M./Heldt, T./Johansson, P. (2006): The effects of attitudes and personality traits on mode choice, in: Transportation Research Part A: Policy and Practice, Vol. 40, 6, pp. 507–525.
Walker, J. L. (2001): Extended Discrete Choice Models: Integrated Framework, Flexible Error Structures, and Latent Variables, Ph.D. thesis, Massachusetts Institute of Technology.
Walker, J./Ben-Akiva, M. (2002): Generalized random utility model, in: Mathematical Social Sciences, Vol. 43, 2, pp. 303–343.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2012 Gabler Verlag | Springer Fachmedien Wiesbaden
About this chapter
Cite this chapter
Hildebrandt, L., Temme, D., Paulssen, M. (2012). Choice Modeling and SEM. In: Diamantopoulos, A., Fritz, W., Hildebrandt, L. (eds) Quantitative Marketing and Marketing Management. Gabler Verlag, Wiesbaden. https://doi.org/10.1007/978-3-8349-3722-3_3
Download citation
DOI: https://doi.org/10.1007/978-3-8349-3722-3_3
Published:
Publisher Name: Gabler Verlag, Wiesbaden
Print ISBN: 978-3-8349-3060-6
Online ISBN: 978-3-8349-3722-3
eBook Packages: Business and EconomicsBusiness and Management (R0)