Discrete Choice Analysis: Predicting Demand and Market Shares

Discrete choice models are widely used for the analysis of individual choice behavior and can be applied to choice problems in many fields such as economics, engineering, environmental management, urban planning, and transportation. For example, discrete choice modeling is used in marketing research to guide product positioning, pricing, product concept testing, and many other areas of strategic and tactical interest. Recent applications to predict changes in demand and market share include areas such as choice of travel mode, coffee brand, telephone service, soft drinks and other foods, financial services, internet access, and choice of durables such as smartphones, tablets, automobiles, air conditioners, and houses.

This program undertakes an in-depth study of discrete choice models (logit, nested logit, generalized extreme value, probit, logit mixtures, hybrid choice models), data collection, specification, estimation, statistical testing, forecasting, and application. The covered topics include analysis of revealed and stated preferences data, sampling, simulation-based estimation, discrete panel data, Bayesian estimation, discrete-continuous models, menu choice, and integration of choice models with latent variables models. The course includes lab sessions where participants are provided with discrete choice software to learn how to use real databases to estimate and test discrete choice models taught in lectures and gain hands-on experience in using new discrete choice techniques for practical applications. By examining actual case studies of discrete choice methods, students will become familiar with problems of model formulation, estimation, testing, and forecasting.

Lead Instructor(s): 

Moshe Ben-Akiva


TBD 2019

Course Length: 

5 Days

Course Fee: 





  • Closed

It is highly recommended that you apply for a course at least 6-8 weeks before the start date to guarantee there will be space available. After that date you may be placed on a waitlist. Courses with low enrollment may be cancelled up to 4 weeks before start date if sufficient enrollments are not met. If you are able to access the online application form, then registration for that particular course is still open.

Registration for the 2018 session has closed. We'll open for the 2019 session this fall.

Participant Takeaways: 

Takeaways from this course include:

  • Understanding discrete choice models and their applications.
  • Learning to apply new discrete choice techniques.
  • Understanding problems of data collection, model formulation, estimation, testing, and forecasting, as learned through case studies of discrete choice methods.
  • Utilizing commonly available software to estimate and test discrete choice models from real databases.

Who Should Attend: 

This program is intended for academics and professionals interested in learning new discrete choice techniques and how to predict choice and forecast demand. It is particularly suited for academics engaged in research. Participants will gain hands-on experience in applying discrete choice software in real-world case studies. A working knowledge of basic statistical methods is needed.

Scholarships are available for graduate students and faculty registering for this course — see Links & Resources below.

Computer Requirements:

Please note that laptops are required for this course. Participants will need to install Biogeme. Tablets will not be sufficient for the computing activities performed in this course.

Program Outline: 

The course consists mainly of a series of lectures, supplemented by labs that develop discrete choice concepts and techniques and demonstrate their applications. The labs offer hands-on experience in applying the material covered in the lectures using discrete choice software and real-world data sets.

Topics Covered Include the Following:

Theories of choice, random utility models, probabilistic choice models, alternative model formulations, statistical estimation procedures appropriate for alternative data sources, currently available computer software, tests of validity, forecasting procedures, and examples of empirical applications.

The following subjects will be addressed during the course:

  • Choice Behavior
  • Binary Choice Models
  • Specification and Estimation of Choice Models
  • Stated Preference Methods
  • Multinomial Choice Models: Probit and Logit
  • Specification Testing
  • Aggregate Forecasting and Microsimulation
  • IIA Tests
  • Nested Logit Models
  • Extreme Value Models
  • Sampling and Estimation
  • Mixture Models
  • Simulation-Based Estimation
  • Dynamic Choice Models and Panel Data
  • Combining Revealed and Stated Preferences
  • Models with Latent Variables
  • Choice from a Menu
  • Bayesian Estimation
  • Endogeneity and Self-Selection
  • Choice Behavior and the Measurement of Well-Being

On the first day of class, participants will receive a copy of Discrete Choice Analysis by Moshe Ben-Akiva and Steven R. Lerman (MIT Press) and a set of additional reading materials covering recent developments and new applications.

Course Schedule: 

View 2018 Course Schedule (pdf, subject to change)

Class runs 9:30 am - 5:00 pm every day.

Special events include a reception for course participants and faculty on Monday night and a dinner on Thursday evening. All evening activities are included in tuition.

Participants’ Comments: 


"Discrete choice analysis is one of the most valuable new tools available to marketers interested in understanding and predicting consumers' choices ... It goes beyond current textbook treatments of discrete choice analysis with discussions of state-of-the-art developments in the area and experimental applications."


"Discrete choice analysis is an effective way to evaluate a new service and forecast future demand. I have applied it to the estimation of user preference ... in order to develop new telecommunication services."


"This course is an excellent review and introduction to discrete analysis theory, ... provides opportunities for hands-on applications. Further, the instructors are major contributors to this area. I highly recommend it."


"It's a must-have course for any economist seeking to learn or refresh their knowledge of discrete choice models."


"Top-notch, concise instruction in lecture. Coverage of topics did not get too detailed and allowed more sub-areas to be uncovered. Course materials were excellent and it was good to come back with many days of notes and a textbook to serve as a resource."


"Ben-Akiva covered a wide range of topics in discrete choice analysis from basic to recent development within a week. Even though the one week is very short to cover all the subjects, his lecture was very intuitively clear and deep. It was a very good experience, and I hope to take another class at MIT if possible."


"The course is one of a kind!"



This course takes place on the MIT campus in Cambridge, Massachusetts. We can also offer this course for groups of employees at your location. Please complete the Custom Programs request form for further details.


Fundamentals: Core concepts, understandings, and tools (35%) 35
Latest Developments: Recent advances and future trends (40%) 40
Industry Applications: Linking theory and real-world (25%) 25

Delivery Methods: 

Lecture: Delivery of material in a lecture format (80%) 80
Labs: Demonstrations, experiments, simulations (20%) 20


Introductory: Appropriate for a general audience (20%) 20
Specialized: Assumes experience in practice area or field (50%) 50
Advanced: In-depth explorations at the graduate level (30%) 30