Defining Choice Set
When a researcher has some consumer choice data in his/her hand and tries to construct a choice model and simulate it against the data, he/she needs to first define a choice set. A Choice Set in discrete choice models is defined to be finite, exhaustive, and mutually exclusive. For instance, consider households' choice of how many laptops to own. The researcher can define the choice set depending on the nature of the data and the interpretation they wish to draw, as long as it satisfies three properties mentioned above. Some examples of choice sets that meet the categories are the following:
- 0, 1, More than 1 laptop
- 0, 1, 2, More than 2 laptops
- Less than 2, 2, 3, 4, More than 4 laptops
Read more about this topic: Choice Model Simulation
Famous quotes containing the words defining, choice and/or set:
“The industrial world would be a more peaceful place if workers were called in as collaborators in the process of establishing standards and defining shop practices, matters which surely affect their interests and well-being fully as much as they affect those of employers and consumers.”
—Mary Barnett Gilson (1877–?)
“But real action is in silent moments. The epochs of our life are not in the visible facts of our choice of a calling, our marriage, our acquisition of an office, and the like, but in a silent thought by the way-side as we walk; in a thought which revises our entire manner of life, and says,—”Thus hast thou done, but it were better thus.””
—Ralph Waldo Emerson (1803–1882)
“By the power elite, we refer to those political, economic, and military circles which as an intricate set of overlapping cliques share decisions having at least national consequences. In so far as national events are decided, the power elite are those who decide them.”
—C. Wright Mills (1916–1962)