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Choice modelling

Choice modeling attempts to model the decision process of an individual or segment in a particular context. Choice modeling may be used to estimate non-market environmental benefits and costs.Many alternative models exist in econometrics, marketing, sociometrics and other fields, including utility maximization, optimization applied to consumer theory, and a plethora of other identification strategies which may be more or less accurate depending on the data, sample, hypothesis and the particular decision being modelled. In addition, choice modeling is regarded as the most suitable method for estimating consumers’ willingness to pay for quality improvements in multiple dimensions. The Nobel Prize for economics was awarded to a principal proponent of the choice modeling theory, Daniel McFadden.
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