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Exploring distinct sources of heterogeneity in discrete choice experiment: An application to wine choice across European consumers

Author:
Gonçalves, Tânia, Pinto, Lígia M. Costa, Lourenço-Gomes, Lina
Source:
Economics letters 2019 v.178 pp. 28-32
ISSN:
0165-1765
Subject:
cognition, logit analysis, market segmentation, models, wines
Abstract:
This paper explores the role of unobserved heterogeneity using different approaches: mixed, scaled and the generalized mixed logit model, and the latent class model, applied to wine choice. Results show that preference heterogeneity appears to be more relevant than scale heterogeneity, and the model accounting for both performs best. This finding suggests that wine choice is complex, demanding a higher cognitive burden, which may lead to the use of simplification strategies when choosing. For the purpose of wine valuation, the latent class model gives useful insights for market segmentation.
Agid:
6347963