Incorporating Latent Variables into Discrete Choice Models - A Simultaneous Estimation Approach Using SEM Software

Integrated choice and latent variable (ICLV) models represent a promising new class of models which merge classic choice models with the structural equation approach (SEM) for latent variables. Despite their conceptual appeal, applications of ICLV models in marketing remain rare. We extend previous ICLV applications by first estimating a multinomial choice model and, second, by estimating hierarchical relations between latent variables. An empirical study on travel mode choice clearly demonstrates the value of ICLV models to enhance the understanding of choice processes. In addition to the usually studied directly observable variables such as travel time, we show how abstract motivations such as power and hedonism as well as attitudes such as a desire for flexibility impact on travel mode choice. Furthermore, we show that it is possible to estimate such a complex ICLV model with the widely available structural equation modeling package Mplus. This finding is likely to encourage more widespread application of this appealing model class in the marketing field.

The Effects of Living in Segregated vs. Mixed Areas in Northern Ireland: A Simultaneous Analysis of Contact and Threat Effects in the Context of Micro-Level Neighbourhoods

This study examines the consequences of living in segregated and mixed neighbourhoods on ingroup bias and offensive action tendencies, taking into consideration the role of intergroup experiences and perceived threat. Using adult data from a cross-sectional survey in Belfast, Northern Ireland, we tested a model that examined the relationship between living in segregated (N = 396) and mixed (N = 562) neighbourhoods and positive contact, exposure to violence, perceived threat and outgroup orientations. Our results show that living in mixed neighbourhoods was associated with lower ingroup bias and reduced offensive action tendencies. These effects were partially mediated by positive contact. However, our analysis also shows that respondents living in mixed neighbourhoods report higher exposure to political violence and higher perceived threat to physical safety. These findings demonstrate the importance of examining both social experience and threat perceptions when testing the relationship between social environment and prejudice.

Exact Solutions to the Symmetric and Asymmetric Vehicle Routing Problem with Simultaneous Delivery and Pick-Up

In reverse logistics networks, products (e.g., bottles or containers) have to be transported from a depot to customer locations and, after use, from customer locations back to the depot. In order to operate economically beneficial, companies prefer a simultaneous delivery and pick-up service. The resulting Vehicle Routing Problem with Simultaneous Delivery and Pick-up (VRPSDP) is an operational problem, which has to be solved daily by many companies. We present two mixed-integer linear model formulations for the VRPSDP, namely a vehicle-flow and a commodity-flow model. In order to strengthen the models, domain-reducing preprocessing techniques, and effective cutting planes are outlined. Symmetric benchmark instances known from the literature as well as new asymmetric instances derived from real-world problems are solved to optimality using CPLEX 12.1.