Daniel McFadden shared the 2000 Nobel Prize in Economics for developing theory and methods for analyzing discrete choice.
Discrete-choice models examine decisions among distinct alternatives, such as whether to use public transport or a car, which product to buy, or whether to participate in a labor market. McFadden developed econometric tools that connect observed choices with underlying preferences and constraints.
His conditional logit model became a major method for estimating choices when people select among multiple alternatives. These methods have been used in transportation, housing, health care, education, and consumer research.
McFadden shared the 2000 award with James Heckman, who was recognized for developing theory and methods for analyzing selective samples. Their contributions were related to microeconometrics but addressed different statistical problems.