chapter  4
86 Pages

Choice Set Definition and Decision Structures

WithDavid A. Hensher, Lester W. Johnson, J.J. Louviere, J. Horowitz

The notion of an elemental alternative can be used to distinguish the explicit alternatives of relevance to the decision-making unit in contrast to the grouped or 'set of assumed identical alternatives' which are used in the definition of the choice set for model estimation and application. Once the alternative decision structures are understood, the next step is to decide on the appropriate choice hierarchy and a mechanism for linking decisions if interdependency exists. The chapter describes alternative decision structures, and introduce a number of concepts which underlie the alternative structures and are necessary for specifying the relationship between alternatives in a given choice set. The behavioural interpretation is that the particular attribute exerts a pure shift effect on choice; and hence, ceteris paribus, higher income families have a higher preference for a particular alternative in the choice set. Equipped with knowledge of the choice set generating process, the task is to define a decision structure within which various choices operate.