An Approach to Simultaneous Estimation and Segmentation in Conjoint Analysis

This paper presents a simultaneous approach to estimating partworths and aggregating consumers in conjoint analysis. First, based on a logit choice model, a “ridge”-like procedure for estimating individual partworths is proposed, and using simulation, the reliability of the estimator is examined. A method of aggregating consumers homogeneous in preference is then presented. The effectiveness of the aggregation procedure is tested on the simulated data. Finally, to illustrate how the total procedure can be applied to the real world, a set of preference data for Japanese automobiles is used.