EXPRESS: The More You Ask, the Less You Get: When Additional Questions Hurt External Validity

Researchers and practitioners in marketing, economics, and public policy often use preference elicitation tasks to forecast real-world behaviors. These tasks typically ask a series of similarly-structured questions. The authors posit that every time a respondent answers an additional elicitation question, two things happen: (1) they provide information about some parameter(s) of interest, such as their time preference or the partworth for a product attribute, and (2) the respondent increasingly adapts to the task—i.e., using task-specific decision processes specialized for this task that may or may not apply to other tasks. Importantly, adaptation comes at the cost of potential mismatch between the task-specific decision process and real-world processes that generate the target behaviors, such that asking more questions can reduce external validity. The authors used mouse- and eye-tracking to trace decision processes in time preference measurement and conjoint choice tasks: Respondents increasingly relied on task-specific decision processes as more questions were asked, leading to reduced external validity for both related tasks and real-world behaviors. Importantly, the external validity of measured preferences peaked after as few as seven questions in both types of tasks. When measuring preferences, less can be more.

An Analysis of Household Consumption of Dairy Products

Household consumption of dairy products is one the major component in the total sales of the Albanian dairy industry. Therefore, understanding the factors which may significantly influence household consumption is important in the planning of farmers, processors and manufacturers. Consumers' responses to changes in price and non-price factors are basic to an economic analysis of almost all the policy decisions related to industry or government programs. Forecasting the future direction of household consumption, and how that direction might be modified through industry efforts or by national programs and policies, requires information on the relationships among prices, incomes, household characteristics and consumer demand. This study focuses on households as consuming units, explains and analyzes their purchasing behavior for dairy products. As milk is a very important component of the Albanians diet, this study explores consumer preferences for milk in Albania and also tries to determine consumers profiles based on their preferences and socio-demographic factors. To reach these objectives, this research designed a conjoint choice experiment survey and collected primary data in the most populated cities of Albania. This study provides useful information to different stakeholders including milk producers and importers. The milk industry and its marketers may benefit from this information by using it to strategically market their milk to different groups.

Hierarchical Bayes Conjoint Choice Models - Model Framework, Bayesian Inference, Model Selection, and Interpretation of Estimation Results

Choice-based conjoint (CBC) is nowadays the most widely used variant of conjoint analysis, a class of methods for measuring consumer preferences. The primary reason for the increasing dominance of the CBC approach over the last 35 years is that it closely mimics real choice behavior of consumers by asking respondents repeatedly to choose their preferred alternative from a set of several offered alternatives (choice sets). Within the framework of CBC analysis, the multinomial logit (MNL) model is the most frequently used discrete choice model due to the existence of closed form solutions for conditional choice probabilities. The popularity of CBC and the MNL model has grown even more since the introduction of hierarchical Bayesian (HB) estimation techniques that accommodate individual consumer heterogeneity in choice data, and which have now become state-of-the-art in marketing theory and practice. Still, researchers and practitioners have to make further decisions under this framework (CBC, MNL, HB estimation), such as how to represent preference heterogeneity. Here, using a normal distribution (and therefore a unimodal distribution) has become the standard approach in the marketing literature. However, the thin tails of the normal distribution suggest that the standard HB-MNL model should not be the “go-to” approach to approximate multimodal preference distributions, because individual preference patterns lying at the tails of the normal distribution (i.e., that do not fit well with the assumption of a unimodal distribution) tend to be shrunk to the population mean. This shrinkage, especially in multimodal data settings, could mask important information (e.g., new or different structures in the data). A mixture of normal distributions avoids this limited flexibility of the most simple continuous approach of assuming a unimodal prior heterogeneity distribution. There are currently two prominent HB-CBC modeling approaches embedding the mixture-of-normals (MoN) approach: the more widespread MoN-HB-MNL model, and the Dirichlet process mixture (DPM)-HB-MNL model. In this article, we review the prominent HB-MNL model (with its normal prior), the MoN-HB-MNL model, and the DPM-HB-MNL model and apply them to an empirical multi-country CBC data set. We compare the statistical performance of the three models in terms of goodness-of-fit and predictive accuracy, show how to include consumer background characteristics in the upper level of these models, and illustrate how to interpret the estimation results (with a special focus on cross-county heterogeneity). In sum, our article serves as a kind of user guide to the estimation and interpretation of Hierarchical Bayes Conjoint Choice Models. For our data, we observed that all three choice models (both with and without consumer background characteristics) resulted in a one-component solution. The DPM-HB-MNL model nevertheless yielded a higher cross-validated hit rate compared to the MoN-HB-MNL and the HB-MNL models due to its even more flexible prior assumptions. The two latter models tended to slightly overfit our empirical data, which was reflected by higher goodness-of-fit statistics but a lower predictive accuracy compared to the DPM-HB-MNL model. We showed that this result could be attributed to the weaker extent of Bayesian shrinkage of these two models. The DPM-HB-MNL model showed a stronger shrinkage effect and seems therefore somewhat more robust against overfitting. Including consumer background characteristics in terms of country of origin information for the respondents did not improve the statistical model performance (especially not the predictive performance). Still, using the country of origin information for respondents in a post-hoc segmentation analysis helped us to explain some differences in brand preferences between the five countries.

Emerging Consumer Preference for Wine Attributes in a European Transition Country – the Case of Kosovo

This study analyzes consumer preferences for wine in Prishtina, Kosovo – a transition country in the Balkans, which is making efforts to withstand to the competition pressure from the traditional neighboring wine producing countries. With the changes in life style and consumer behavior, and incomes rising rapidly since the last conflict, it is imperative to survey the changing demand for producers to compete in the domestic markets. Conjoint Choice Experiments were used to evaluate wine consumer preferences based on wine type (white vs. red), origin (domestic vs. imported), taste (sweet vs. dry) and price. Four distinct classes of consumers were identified. The top two important attributes in the choice of wine are the type and origin but preferences vary across groups – type of wine and origin appear far more important when compared to price, especially for the richest identified segment, whose consumers prefer more expensive wines.

Analysis of urban consumer preferences for honey in the context of a transition economy – A case study for Albania

Summary This paper aims to analyze urban consumer preferences for Albanian honey, focusing on key product attributes such as origin, type, location and price, using a conjoint choice experiment and latent class approach. Origin and location-landscape were found to be the most important factors for most surveyed consumers. Albanian consumers prefer honey produced in mountainous forests and on pastures. Moreover, multi-flower honey is preferred compared to chestnuts honey. These results can be used to producers’ advantage when local branding and well-perceived certification (e.g., producer associations’ brands) would be applied in order to increase the consumer awareness and strengthen the intrinsic features of the product especially for small producers. Labeling should be clear and emphasize the origin as well as the natural landscape where beehives are kept. Furthermore, in its regionalization economic development policy, the government may consider supporting honey produced from the mountainous areas.

Monetary Valuation of Urban Forest Attributes in Highly Developed Urban Environments: An Experimental Study Using a Conjoint Choice Model

It is important to integrate user preferences and demands into the design, planning, and management of urban forests. This is particularly important in highly urbanized areas where land is extremely limited. Based on a survey with 600 participants selected by quota sampling in Seoul, Korea, we developed a conjoint choice model for determining the preferences of urban dwellers on urban forest attributes, the levels of attributes, and the preferences for particular attributes. Then, the preferences were transformed into monetary values. The results indicated that urban dwellers preferred broadleaved forests over coniferous forests, soil-type pavement materials over porous elastic pavement materials on trails, and relatively flat trails over trails with steep slopes. The model indicated that participants were willing to pay an additional 11.42 USD to change coniferous forest to broadleaved forest, 15.09 USD to alter porous elastic pavement materials on trails to soil-type pavement materials on trails, and 23.8 USD to modify steeply sloping trails to relatively flat trails. As previously reported, considerable distance decay effects have been observed in the user preferences for urban forests. We also found a significant difference in the amount of the mean marginal willingness to pay among sociodemographic subgroups. In particular, there were significant positive responses from the male group to changes in urban forest attributes and their levels in terms of their willingness to pay additional funds. By contrast, the elderly group had the opposite response. In this study, we were not able to integrate locality and spatial variation in user preferences for urban forests derived from locational characteristics. In future studies, the role of limiting factors in user preferences for urban forests and their attributes should be considered.

Assessing consumer preferences and willingness to pay for organic tomatoes in Albania: a conjoint choice experiment study

Albania has potential for developing the organic agriculture sector; however, it is a new industry and constraints abound including lack of consumer preferences information for organic food. Knowledge on consumer preferences and behaviour toward organic (bio) products is crucial for market development benefiting potential entrepreneurs and government policies. They need to know the preference for preferred product attributes and willingness to pay. Tomato, which is the most important vegetable in terms of consumption and production in Albania, is the subject of this study. A conjoint choice experiment with the most important product attributes: production type (bio vs. conventional), production system (open field vs. greenhouse), origin and price were used to design the choice surveys. Four distinct classes have been identified as significant using latent class analysis. The classes are summarized as: bio-ready consumers, price sensitive consumers, variety seeking consumers and quality seeking consumers. Origin played a small influence on preference. Education and income did show some influence on preference for organic tomatoes. Although the organic food market in Albania is in its infancy stage, organic tomatoes are clearly preferred and many consumers are willing to pay a premium price.