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Classifying individuals into distinctive groups in discrete choice modelling work has become a common procedure since latent class models were introduced in the field. However, latent classes have certain shortcomings regarding the interpretation of the identified classes. On the other hand, hybrid choice models incorporating latent variables and psychometric data, are a powerful tool to treat and identify some underlying attitudes affecting behaviour; however, the treatment of the latent variables into the utility function has not been analysed in sufficient depth. Latent variables accounting for attitudes resemble socio-economic characteristics and, therefore, both systematic-taste-variations and categorizations may also be considered.

We examine different ways to categorize individuals based on latent characteristics, and explain why this may be convenient. In particular, we propose a direct categorization of …