Faculty of Science, Agriculture & Engineering

Short Courses (CPD)

Short Courses (CPD)

About the Course

Behavioural Models for Individual Choices

  • Monday 12 - Friday 16 February 2018

Understanding how people make decisions and what drives their choices is a key question in many disciplines. This course provides you with the ability to select appropriate models and use them effectively.

Understanding how people make decisions and what drives their choices is a key question in several disciplines, including transport, economics, sociology, psychology, marketing, and the environment.

You'll find out about:

  • the fundamentals of decision-making theory
    • with particular emphasis on understanding different views of the decision-making process between the two approaches of perfect and bounded rationality
  • the pros and cons of each approach
  • the importance of moving towards a unified theory of the decision process
  • the most common mathematical models which simulate and forecast individual choices
    • starting from the very popular discrete choice models (based on the neoclassical economic assumption of rational decision makers) and extending them to account for several effects of bounded rationality.

You'll learn how to:

  • specify and estimate these models
  • evaluate which model provides the best representation of the phenomenon under study

You'll also learn about:

  • the type of data needed to understand and model individual choices
  • the valuation measures that can be computed from the models estimated
We support the theory with extensive empirical work. This gives you the opportunity to:

  • estimate the models discussed in the lectures, using real sets of data
  • apply them to forecast the demand
  • use Biogeme and/or Python Biogeme software

Finally, we'll also demonstrate how to write a report to present and explain results to policy makers or industrial clients.

Who is the course aimed at?

The course will be of particular interest to those working in transport companies (road, rail, air, sea, and working with colleagues in demand management, planning, marketing and so on), and those working in public administration.

Objectives and Outline

Behavioural Models for Individual Choices

Course Objectives

By the end of the course, you'll understand:

  • the basic concept of microeconomic theory and bounded rationality
  • the link between the mathematical models and the phenomena they are able to reproduce
  • the strengths and weaknesses of each model
  • the nature of the data that we can use to estimate and forecast individual choices
  • how to choose the right data for the right phenomenon and/or problem under study.

You'll also know how to:

  • formulate the specification of mathematical models (from basic to more advanced models), mastering the microeconomic and mathematical conditions (such as the identification properties)
  • analyse data using both standard and advanced discrete choice models
  • use software to estimate both standard and advanced DCMs
  • interpret and compare the results based on statistical analysis
  • provide a convincing argument about the usefulness of different models for specific problems.

You'll have the opportunity to read and discuss some papers where some advanced discrete choice models and their choice is estimated.

For each of the specific problems studied, involving individual choice, you'll be able to:

  • identify the adequate model structure (among those discussed in the lectures) to simulate the phenomenon
  • justify the theoretical reasons behind your choice
  • build (specify, estimate and evaluate) the mathematical models discussed in the lectures to simulate individual choices in a variety of contexts

You'll also be able to:

  • evaluate the best model using statistical tests and theoretical consideration
  • forecast the demand under various policies using the estimated models estimated
  • compute the valuation measures discussed in the lectures and demand elasticity using the models estimated
  • identify if a dataset is adequate for the simulation of the phenomenon under study
  • write a methodologically sound report containing a description of the phenomenon, treatment of data, and a theoretical description of the model specifications (including both standard and advanced DCMs), including discussion on the microeconomic and the identification properties, estimation and a critical discussion of the results.

Course Outline

  • Introduction
    • Why it is important to study the decision process and model individual choices
    • Understanding and forecasting individual choices
    • Examples from various disciplines (transport, health, economics, marketing, urban etc).
  • Theory of individual choice
    • Definition of decision maker, choice set, feasibility of alternatives and constraints
    • Concept of utility, compensatory decisions and maximisation
    • Non compensatory choice and other heuristics
    • The role of behaviour, attitudes, goals and social influence in the decision process
    • Behaviour changes and preference formation.
  • Mathematical models
    • Microeconomic and mathematical derivation of the basic discrete choice models: multinomial logit model
    • Modelling preference heterogeneity among individuals, correlation among alternatives and a variety of substitution patterns: mixed logit model
    • Utility specification and model estimation in practice
    • Modelling effect of bounded rationality, such as habit/inertia effect, learning effects, attitude and perceptions: hybrid choice model
    • How to choose the best model
    • When it is appropriate/correct to use each type of model.
  • Understanding and using multiple data sources
    • Nature of data: Psychological indicators, Revealed and Stated preference data, Cross sectional, short and long Panel data
    • Modelling with multiple data sources.
  • Monday 12 - Friday 16 February 2018

Further Information

Behavioural Models for Individual Choices

Prerequisites

Course content

To attend the course, you should have knowledge/experience equivalent to the content of the following Modules:

Prerequisite knowledge

To attend the course, you should have a reasonable level of knowledge of the following topics:

  • basic knowledge of statistics (t-test, sampling problems etc)
  • basic econometric knowledge (such as linear regressions)
  • although not a requisite, some knowledge about data collection or empirical experiments at individual level would also be useful

Please contact the Professional Development Unit if you require further information.

Academic Module Outline

This course is also delivered as a Module (code CEG8427) on at least one of the Faculty's Masters programmes, the majority of which can be studied part time, making them suitable for those in employment. You will attend with full and part time registered students. The Academic Module Outline is available via the University's Module Catalogue.

Update to Course Content

Please note that our courses are reviewed regularly, both in response to feedback and so that information about recent research and developments can be included. Thus, content may be subject to change.

Presenters

Behavioural Models for Individual Choices

Presenters

Newcastle University
  • Prof Elisabetta Cherchi (Course Leader)

Fees

Behavioural Models for Individual Choices

Fees

  • Behavioural Models for Individual Choices
    • £1325

We offer a 30 percent discount to full time students and to Newcastle University staff.

The course fee includes tuition, course materials, lunch and refreshments.

[ Information about Cancellations ]

Formal assessment may be available for this Course. Assessment attracts an additional fee of £365, and delegates will be issued with a transcript and Certificate of Credit Achieved. Owing to visa restrictions the assessment option is not available to international students outside the European Economic Area (EEA).