4.7 Econometric Models for Probabilistic Choice Among Products

This paper reviews several recent developments in econometric demand
analysis which may be of interest in market research. Econometric models
of probabilistic choice, suitable for forecasting choice among existing or
new brands, or switching between brands, are surveyed. These models
incorporate attribute descriptions of commodities, making them statistical
counterparts of the Court-Griliches-Lancaster theory of consumer behavior.
Particular attention is given to models which yield tree structures of
similarities between alternatives. Also reviewed are methods for
estimating econometric models of probabilistic choice from "point-of-sale"
sample surveys.