Choice Modelling

Choice Modelling

The State of the Art and the State of Practice

Edited by Stephane Hess and Andrew Daly

Choice modelling has been one of the most active fields in economics over recent years. This valuable new book contains leading contributions from academics and practitioners from across the different areas of study where choice modelling is a key analytical technique, drawn from a recent international conference.

Chapter 2: Forecasting behaviour: with applications to transport

Andrew Daly

Subjects: economics and finance, valuation, environment, valuation


Choice modelling has developed enormously over the last few decades as the principal methodology for the quantitative understanding of human behaviour. In particular choice modelling has been used intensively for the determination of people’s willingness to pay (WTP) for goods and aspects of goods, both in market and non-market contexts. The data bases for this work have been dominated by the collection of stated preferences and in particular stated choices. Choice modelling applications now cover a wide range of economic sectors: transport, health, environmental analysis, marketing and other fields. These developments and the expansion of the field can only be viewed as success. However, it is interesting to contrast the objectives and basis of this more recent work with the early development of choice modelling, which began in earnest in the 1960s. At that time, the focus of the work was on forecasting behaviour, based on observations of revealed preferences (i.e. what people are observed to do) and largely focussed on transport applications. While not questioning the recent success of choice modelling, it is interesting to look at the way in which choice modelling has developed away from its earlier methods and applications and to consider whether there is anything for modern choice modelling to learn from those original areas and methods.

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