Theoretical, methodological and practical issues of choice models

A brief overview and synthesis

Abstract

This paper analyzes and synthesizes the fundamentals of discrete choice models. This paper also
discusses the basic concept and theory underlying the econometrics of discrete choice, specific choice
models, estimation method, model building and tests, and applications of discrete choice models. This
work highlights the relationship between economic theory and discrete choice models: how economic
theory contributes to choice modeling and vice versa.

Keywords: Discrete choice models; Random utility maximization; Decision makers; Utility function;
Model formulation