A Spatial Choice Model

Proceedings of the Business and Economic Statistics Section, Presented at the Annual Meeting of the American Statistical Association, Toronto, Canada., August 15-18, 1983

6 Pages Posted: 11 May 2016

See all articles by Wayne S. DeSarbo

Wayne S. DeSarbo

Pennsylvania State University

Elaine Keramidas

Bell Laboratories

Date Written: August 15, 1983

Abstract

A new multidimensional scaling model designed to analyze binary choice data (e.g., subjects rendering buy/no buy decisions concerning a number of actual products). Maximum likelihood estimation procedures are utilized in procuring a joint space representation of both subjects and products providing information regarding issues of appropriate market segmentation bases and respective product positioning strategies. We initially review the existent statistical, econometric, and psychometric literature concerning the treatment of such binary choice data. Our nonlinear logistic type model is described, as well as the penalty function algorithm utilized to estimate the parameter values. Results of an application of the spatial choice model to a synthetic data set are presented. An application concerning consumer choices for nine brands of sports cars is discussed. Finally, directions for future research are presented in terms of generalizing the model to accommodate three-way choice data and modelling ideal points.

Suggested Citation

DeSarbo, Wayne S. and Keramidas, Elaine, A Spatial Choice Model (August 15, 1983). Proceedings of the Business and Economic Statistics Section, Presented at the Annual Meeting of the American Statistical Association, Toronto, Canada., August 15-18, 1983, Available at SSRN: https://ssrn.com/abstract=2778176

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Elaine Keramidas

Bell Laboratories ( email )

600 Mountain Avenue
Murray Hill, NJ 07974
United States

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