Table 1 reports the fits of two-stage models with and without heterogeneous decision rules (latent classes) as well as versions that allow for conventional representation of continuous covariates (i.e., no splines). According to standard fit metrics, the proposed model with five latent classes for both men and women fits the data better than all nested models (e.g., homogeneous and linear utility) and nonnested ones with polynomial representation of continuous covariates, and these differences are statistically significant. To safeguard against overfitting, we also evaluate goodness of fit using a holdout sample consisting of 181 men. These out of sample quotes reaffirm that a model outperforms other more traditional specifications. Besides superior fit, our model captures features of decision procedures that are distorted by traditional approaches. Additional details are in SI Appendix, Section S4.
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