A discrete choice experiment (DCE) is a research method used in economics, marketing, and social sciences to understand individuals’ preferences and choices among a set of alternative options. It is commonly used to study consumer behavior, healthcare decision-making, transportation planning, and policy analysis.

In a discrete choice experiment, participants are presented with a series of choice scenarios, each consisting of two or more alternatives. These alternatives vary systematically across a set of attributes or characteristics, and participants are asked to choose their preferred option from each scenario. By analyzing the choices made by participants, researchers can estimate the relative importance of different attributes and understand how individuals make trade-offs between them.

The design of a discrete choice experiment involves several key components:

  1. Attributes: These are the characteristics or features that define the alternatives. Attributes can be tangible (e.g., price, brand, quality) or intangible (e.g., convenience, time, environmental impact). Each alternative is described by a combination of attribute levels.
  2. Levels: Each attribute is defined by a set of levels representing different values or options. For example, if the attribute is “price,” the levels could be “low,” “medium,” and “high.”
  3. Choice sets: A choice set consists of a set of alternatives defined by their attribute levels. Participants are presented with multiple choice sets and asked to choose their preferred option from each set.
  4. Experimental design: The design of the choice sets is crucial to elicit meaningful and unbiased responses. Researchers typically use statistical methods, such as orthogonal arrays or efficient designs, to create a balanced and efficient set of choice scenarios.
  5. Analysis: The choices made by participants are analyzed using statistical models, such as multinomial logit or mixed logit models. These models estimate the relative importance of attributes and quantify the trade-offs individuals make when choosing between different alternatives.

The results of a discrete choice experiment can provide valuable insights into consumer preferences, market segmentation, policy evaluation, and product development. It can help researchers and decision-makers understand how individuals weigh different attributes and inform decision-making processes based on a better understanding of people’s preferences.

By: Nazrul Efendy Bin Noordin